It takes a scorecard to keep up with the biotech IPO action these days. Four of the 8 companies planning to go public in the U.S. this week are biotechs, including Minerva and Syndax, and the crush of companies at the Nasdaq gate is making it increasingly hard for all of them to find a large enough group of investors to back their play.
Cases in point: Ambrx. The antibody drug specialists at the San Diego biotech, a Scripps spinout, decided to drop its $86 million IPO, citing market conditions. Colorado's GlobeImmune once upon a time plotted a $75 million IPO, lowering its sights to $35 million when it decided to try again last March. The infectious disease company has now quickly shrunk its goal to a mere $15 million in recent days, with plans to sell a million shares at the low end of its range. And Cambridge, MA-based Minerva Neurosciences slashed its range by half and lowered expectations to about $33 million.
But the errors and walkouts aren't preventing other players from trying to get into the game. Within the last couple of days we've seen at least three more biotechs file for an IPO:
- Auris Medical, a Swiss biotech focused on inner ear diseases which filed an $86 million offering. It's planning to list as EARS (get it?). Their lead drug is AM-101, a Phase III level drug for acute tinnitus, which is characterized by a ringing in the ears. Topline data is expected in 2016. S-1
- Then there's Avalanche Biotechnologies in Meno Park, CA. Avalanche is following the hot gene therapy trail, looking for $86 million--a boilerplate figure seen frequently in biotech IPOs--to support its work on wet AMD and other eye diseases. It plans to list as AAVL, a cross between its name and the benign delivery vector it uses. S-1
- Viamet Pharmaceuticals filed a $75 million IPO to back its work on antifungal products. The biotech's lead program is the oral VT-1161, in mid-stage development for recurrent vulvovaginal candidiasis. S-1
Looking backward, the IPO market looked great over the past 6 months, even if you factor in a stretch when biotech stock indexes slid before bouncing back. A total of 28 venture-backed IPOs raised close to $5 billion in the second quarter. And 16 of those 28 offerings--which raised $1.2 billion--were for biotech and med tech companies, according to the stats kept by the NVCA. That's far off the $1.7 billion pace life sciences companies set in a boisterous Q1, but the total for the first half comes very close to all the money - about $3.5 billion - raised by biotechs last year.
"With the various stock indices continuing to reach new heights, the environment for IPOs remains quite favorable--welcome news for venture-backed companies that have been waiting for the opportunity to go public for several years now," said Bobby Franklin, CEO of the NVCA, in a statement. "Led by the biotechnology sector, life sciences companies appear to be the primary beneficiaries from the favorable IPO environment, with more than half of the offerings during the quarter coming from life sciences companies, marking the fifth consecutive quarter for double digit listings. It's good to see continued investor interest in venture-backed companies, especially with there being such a backlog of great companies wanting to go public."
It's hard to say just how long the crowd will remain at the IPO gate. Last year's boom in new offerings clearly inspired a host to follow up while investors were still interested in high-risk offerings. The trend quickly swept up the most promising biotechs, but low-profile companies are competing for the attention of a tough audience with plenty to choose from. That's a prescription for an increasing number of failures and setbacks.
- here's the release
Special Report: The top 10 biotech IPOs of 2013