There were a few misfires on the biotech IPO front in the fourth quarter of 2013, but the National Venture Capital Association says it tallied 6 newly minted public drug developers in the period, winding up a big year. And as far as the NVCA is concerned, there's good reason to believe that this trend will continue to run strong in 2014 for venture-backed biotechs.
"IPO activity for venture-backed companies continues to improve. The biotech sector is especially notable because it made up over half of the 2013 IPOs, which is more than the previous five years combined," said John Taylor, head of research for the National Venture Capital Association, in a statement. "The on-ramp provision of the JOBS Act is likely a significant contributor to this shift and the venture industry overall remains hopeful that IPO and M&A levels will further strengthen as the bulging pipeline of mature companies awaits favorable market conditions."
Those 6 companies raised $486.7 billion from their IPOs in the final three months of the year.
The industry starts 2014 with a long lineup of IPO pitches in the pipeline. But after several companies recently decided to pull back, citing market conditions, there has been increased speculation that the IPO party may be about to end. The party may be making less noise than we heard in the second and third quarters of this year, but the beat goes on. That could mean more IPOs with fewer of the big opening-day gains that some of the more high-profile companies have been able to achieve.
The end result is that more biotechs going public increases confidence in the VCs and gives them an added ability to raise new funds to back more startups. That's a net positive that will benefit the industry for years to come, unless investors wind up getting so badly burned they once again walk away.
- here's the release
Special Report: No end of biotech IPO frenzy in sight