'Next wave of IPOs' will arrive in summer, predicts biotech-focused VC partner

Delegates at the LSX World Conference in London this week seemed to agree on one thing—the biotech IPO window finally re-opened this year. This sentiment has persisted despite the fact that the initial run of public offerings died down by the spring.

For Francesco De Rubertis, co-founder and partner of London-based life sciences investment firm Medicxi, the current lull is to be expected. What’s more, he expects “at least a number of IPOs” to arrive as soon as the summer.

“In the absence of other external [factors], the natural dynamics of markets should say that now there will be another big number of investors that will become active on the public markets, and that will translate in the next wave of IPOs,” he told Fierce in an interview on the sidelines of the LSX conference on April 30.

To back up his prediction, De Rubertis pointed to the popularity of secondary stock offerings among publicly-listed biotechs in recent months. An increase in these offerings is “already a signal of good health of the markets,” he explained, as they show that “investors are excited.”

Increased activity around secondary offerings “always comes before the IPO wave,” De Rubertis pointed out.

Medicxi launched its latest $400 million fund in July 2023 with the stated aim of “backing visionary biopharma entrepreneurs.” De Rubertis said he is now being “pitched a lot from bankers” who are keen for more biotech IPOs.

Clearly, these investors haven’t been put off by the mixed fortunes of this year’s first wave of publicly-listed biotechs. While most of the January and February crop received a warm reaction from the markets initially, their valuations have dropped off since.

A Fierce Biotech analysis of data from S&P Capital IQ shows that only one—CG Oncology—is still trading above its IPO price. It’s an even more impressive feat for CG considering the bladder cancer-focused company was not only the first biotech to go public this year, but also brought in the most money via its significantly upsized $380 million offering

The biotechs that have followed in CG’s footsteps haven’t fared as well, with Metagenomi in particular seeing its stock tank from a $15 debut price on Feb. 9 to just $6.17 by the close of May 2. The preclinical gene editing company’s fortunes haven’t been helped by Moderna’s decision this week to exit a pact worth up to $3 billion in potential biobucks.

De Rubertis was dismissive of reading to much into the recent stock price fluctuations among the most recent crop of biotechs, however, attributing the changes to the “physiology of the markets.”

Annalee Armstrong contributed to this article.