Despite all the talk of gridlock and polarization in Washington these days, successful, bipartisan pieces of legislation are not a thing of the past. One of them is the Jumpstart Our Business Startups (JOBS) Act, which makes it easier for emerging growth companies to raise capital by going public. The JOBS Act provides qualifying companies with a five year “on-ramp” period to comply with some of the regulatory requirements involved when making the transition from private to public.
Many biotechnology companies have taken advantage of these newly relaxed rules to go public. In the 16 months since the JOBS Act was signed into law, a total of 34 domestic biotech companies have gone public – all of whom used the JOBS Act to do so. In the 16 months prior to enactment, there were only 19 US biotech IPOs. In other words, there has been a 79% increase in the number of biotech IPOs since the JOBS Act took effect.
These companies are using their IPO capital to create jobs and fund R&D for the next
generation of miracle medicines and advanced biofuels. The Kauffman Foundation found that emerging growth-sized issuers grew employment by 135 percent in the five years following their IPO – the length of the IPO On-Ramp in the new law. Overall, 92 percent of a company’s total job growth occurs after its IPO.
With all of the focus on the blockbuster biotech IPO market this year, we’ve decided to dedicate two sessions at the upcoming 12th Annual BIO Investor Forum (October 8-9th, 2013 in San Francisco) to a discussion of the public markets. We’ll hear from investors and company management about their experience making the transition from private to public. The BIO Investor Forum is a must-attend event for companies setting their sights on an IPO. A full 71% of all domestic biotech IPOs this year have attended the forum.
Be sure to check out the full program.