With London biotech Circassia clearing about $332 million in a record-breaking U.K. IPO, a spate of other European life sciences outfits sit stage left with eyes on the public markets, stoking hopes that the stateside fervor over drug developers could cross the ocean and line their pockets.
As Reuters reports, European bankers, bankrollers and biotechs are optimistic Circassia's success is a sign of things to come, pointing to AC Immune and Molecular Partners as potential next entrants onto the IPO scene. For AC Immune, its fortunes are closely linked to some soon-to-come Phase II results for the Alzheimer's treatment crenezumab, and Reuters' sources figure the biotech may swing for a public debut if the drug performs well. Molecular Partners, on the other hand, is already a revenue-generating operation, most recently licensing its drug-delivery technology to Roche ($RHHBY).
And the list goes on: Switzerland's Novimmune may consider a float this year, while smaller French outfits Oncodesign, Genomic Vision and Genticel are said to be eyeing Euronext IPOs.
"There is growing noise suggesting the IPO market is opening up in Europe and, in fact, it would be surprising if it didn't," Index Ventures' Francesco De Rubertis told Reuters. "There is normally a lag of about a year from the U.S. taking off and Europe following."
But despite mounting continental optimism, there are deep-seated differences between markets overseas and in the U.S. America's wide pool of biotech companies has spawned a complementary horde of specialist funds and investors who understand the business and are willing to make risky bets on drug development. Europe, by contrast, is driven more by generalist backers, and many investors have been slow to forget burst bubbles past, according to Reuters.
As such, as the U.S. market for biotech IPOs exceeded hyperbole over the past year, many overseas life sciences companies have chosen to make their market debuts on the Nasdaq instead of at home. The Netherlands-based UniQure ($QURE) pulled off one of the most successful U.S. IPOs of this year, and the promising U.K. medical device outfit Lombard Medical is plotting to make its $80 million first offering in America.
But money has a way of changing people's minds, and a few more high-dollar success stories like Circassia may lead investors across Europe to give biotech another shot.
"The market is receptive to good companies that have got a well thought out story," Circassia CEO Steve Harris told Reuters. "I don't know that there will be a lot, but I'm sure there are a number of other good quality companies that will come to market in Europe."
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