As detailed in The New York Times, the potential for deal-making in the industry has resulted in a big surge in the biotech sector. According to the article, last month alone, seven companies completed I.P.O’s and at least five are lined up behind them. Furthermore, according to data provided by NASDAQ, all 16 of the biotechnology companies that have gone public this year are up 48 percent on average from their offering prices.
In fact there have been 19 I.P.O’s so far this year, averaging a 54% return since their I.PO. Since May alone, there have been 14 I.P.O’s, more than all I.P.O’s counted in the full year for 2011 or 2012. According to NASDAQ, there are six biotech companies lined up to go public in the next few weeks. They include:
- Onconova Therapeutics – 7/25/2013
- Conatus Pharmaceuticals* – 7/25/2013
- Cellular Dynamics International – 7/25/2013
- Heat Biologics – 7/24/2013
- Agios Pharmaceuticals* – 7/23/2013
Since entering the NASDAQ earlier this year, both Bluebird Bio and Prosensa were two of the top 10 performing companies (along with two other biotech’s: Stemline Therapeutics and Epizyme), both of which happen to be 2012 BIO Investor Forum alumni.
Bluebird Bio’s I.P.O was on June 19th of this year and its stock has increased 78 percent. The Cambridge, MA based company signed a three-year oncology research deal with Celgene in March which included a $75 million upfront payment.
Prosensa, a Dutch biotech company, originally planned their I.P.O a week or two after the Fourth of July holiday, but instead chose to open on June 28th due to positive investor sentiment.
One possible explanation for this surge is the signing of the JOBS Act in July of 2012. All 28 biotech companies that have completed an I.P.O. since the Act was signed have filed under the emerging growth company provision of which BIO was a big supporter. One important provision of the Act is the ability for emerging growth companies to conduct “testing the waters” meetings with potential investors. Biotech’s have reported that these meetings, which were not allowed before the JOBS Act passed, have been extremely helpful in generating interest in their offering. To hear more about the JOBS Act and what it means for life sciences companies, read a guest post on Forbes from Kenneth I. Moch, the President and CEO of Chimerix, Inc. and a BIO Board member.
A preliminary list of returning BIO Investor Forum alums presenting updates and new innovations within their companies, as well as an entirely new class of first-time presenters at the 2013 BIO Investor Forum can be found here.