A few days ago Juno Therapeutics ($JUNO) rolled out its red-hot IPO on its way to raising more than $300 million for its CAR-T cancer work. And that was right after Bellicum ($BLCM) priced above the range for its own work in the field.
The back-to-back winners, though, can't camouflage signs of stumbling in the biotech IPO field after two long years of fresh offerings. Lower-profile biotechs are either pulling back on price or putting IPOs on the shelf. That's to be expected. After two years, the IPO market is showing signs of wear and tear. Yesterday's backlash against biotech stocks highlighted the sector's growing vulnerability to aggressive price negotiations by U.S. payers like Express Scripts--which the industry has long feared. And, after all, more than a few observers never expected the IPO window to remain open for as long as it has.
To be sure, this is one trend that has been making an enormous difference in biotech. The billions of dollars raised on the market in IPOs and secondary offerings has been bankrolling an expanding amount of development work at U.S. companies. European biotechs may find it tough going on the continental exchanges, where investors have long memories, but several have been welcomed on Nasdaq. And the cash-outs for venture groups have inspired a long lineup of new funds with billions more that will continue to back new and existing companies.
For biotech financing, these are the days. Experienced execs are cycling back through their second, third or fourth startups, with a good idea for what might work in the clinic and an experienced eye for annual budgets and recruiting. And they're tying up with weathered professionals in the VC industry who survived the financial crisis of 2008.
This fecund environment offers the promise of advancing the new mid- and late-stage drugs that Big Pharma frankly needs in order to survive. Just ask the folks at Sanofi ($SNY), which likes to go deep on its biotech relationships.
Whether or not the IPO boom actually makes it all the way through 2015, the historic run will provide cash for new R&D projects for some years to come. A big round of promised clinical successes, which should be marked by upcoming approvals, will in turn help inspire a new round of investing that can continue to drive biotech.
This is one of the most hopeful New Year's in FierceBiotech's 13-year history. It should not pass unmarked. -- John Carroll