The big question at the beginning of this year was whether investors would continue to eagerly buy up shares offered in new biotech IPOs, continuing the burst of new offerings that injected billions of dollars into the industry last year. As of today, the answer--for at least a few select biotechs--is a boisterous "yes."
Dicerna Pharmaceuticals ($DRNA) got things started off with a bang yesterday, pricing shares at $15--a solid premium over the $11 to $13 range it had posted--and then watched as the share price tripled over the course of the day. Shares closed at $46. The biotech--a 2010 Fierce 15 company--raised $90 million and offered some fresh evidence that RNAi has been experiencing a renaissance with investors.
Ultragenyx ($RARE) kept the roll going, pricing its shares well above the range at $21 and raising $121 million. On the open today, the shares immediately shot up to about $45. The rare disease drug developer has swiftly put together a significant pipeline, outlining plans to grow into a full-fledged biotech with marketing operations in select regions around the world. And investors clearly bought into the story at Ultragenyx, a 2013 Fierce 15 company.
Not all companies can expect star treatment this year, a point that was underscored in Trevena's rollout. The biotech ($TRVN) priced its shares at $7, well below the $12 to $14 range the company set out for itself before postponing its IPO last fall. But the King of Prussia, PA-based company did manage to raise $65 million. Celladon in San Diego raised $44 million, opening above its IPO price, which faded after a brief pop. And Cara Therapeutics ($CARA) raised $55 million for its opioid pain work by pricing shjares at the low end of the range.
More than two dozen biotechs have been angling for a place in the public spotlight this month, an unprecedented number that says a lot about the industry's pent up desire to turn to IPOs after a long and painful exile from Wall Street. If IPOs continue hot through 2014, the fresh source of cash will continue to bolster the value of biotech assets--a big factor for Big Pharmas in the market for new deals and products. The surge will also help the most active venture groups in life sciences to raise more cash by satisfying investors with a new round of exits.
On the other hand, it's highly unlikely that the glut of biotechs trying to crowd through this window will achieve the same stellar results as Dicerna and Ultragenyx. And there's still plenty of concern that the biotech IPO wave looks more and more like a bubble. If so, it has yet to burst.
Special Reports: FierceBiotech's 2013 Fierce 15 - Ultragenyx | FierceBiotech's 2010 Fierce 15 - Dicerna Pharmaceuticals