If you’re an emerging biotech company looking for your first round of funding, San Francisco may be your best bet to connect with the right investors. Innovative early-stage biotech start-ups are finding massive success in the Bay Area as the investment community shifts its focus back toward companies developing cutting edge technologies and therapeutic solutions, in order to become commercially viable and have a real and sustained economic impact. Investors are realizing that the rewards for supporting early-stage biotechs are potentially greater than for supporting the tech industry, the industry most associated with San Francisco and the greater Bay Area.
The industry has also taken notice of this renewed interest and friendly financial markets, completing 25 company IPOs on U.S., European, and Australasia exchanges in the first half of 2017. That has equated to the 2017 U.S. IPO market doubling the amount raised to date from IPOs in 2016. Of the 25 companies that have completed their IPOs, 19 were listed on the U.S. exchanges and have returned an average share price increase of 12.3 percent. This strong performance, along with the surge in funding and deal-making especially in San Francisco, continues to encourage other companies currently on the IPO runway to launch their offerings in the second half of 2017, particularly if the financial climate continues to remain positive.
According to Silicon Valley Bank, in the past three years, more than 40% of IPOs had been pre-clinical or Phase I. Moreover, the median time from close of Series A to IPO is just four years, the quickest since the IPO window opened in 2012. Biotech innovation is becoming faster, cheaper, and less risky due to both advances in technology as well as regulator changes, which streamline the R&D process. As a result, we can expect more investors to continue backing companies with promising pipelines and ideas.
The BIO Investor Forum, happening October 17-18 in San Francisco, is the perfect event for emerging private and public companies to connect with prospective investors to make the deals that drive our industry. BIO Investor Forum registration is already pacing ahead of prior years and the list of investors in attendance this year is robust. We hope to see you there!