Biotech IPOs: Rewards Worth The Risk

An analysis by START-UP reveals that newly public companies are raising more money (on average) than comparable companies who remained private, even if total dollars for the pool of public firms is dwarfed by the total amount raised by their private brethren.

For biotechs of a certain ilk – older than five years with a mid-to-late stage clinical program – the decision to test the public waters may feel like a Hobson’s choice. Assuming the start-up’s venture investors are patient and will continue to back the group, the company can stay private and continue to push candidates through the clinic, hoping an M&A exit may materialize. Certainly given today’s capital markets, it’s easier for a biotech to choose such a path – if it remains open. But as venture capitalists ramp up fundraising efforts of their own, they also need to push for liquidity events, and absent an acquisition, the only choice may be a public offering.

Public investors certainly don’t have much enthusiasm for companies without revenue, which suggests that biotechs opting for a public debut...

Read the full article – start your free trial today!

Join thousands of industry professionals who rely on Scrip for daily insights

  • Start your 7-day free trial
  • Explore trusted news, analysis, and insights
  • Access comprehensive global coverage
  • Enjoy instant access – no credit card required

More from Deals

Private Equity Targets Bavarian Nordic But Major Investor Balks

 
• By 

After “intense negotiations”, Bavarian Nordic’s board plans to recommend a DKK19bn ($2.98bn) offer by private equity firms Nordic Capital and Permira to take the company private.

GSK Gains Hengrui’s PDE3/4 Inhibitor, Options For 11 Early Assets In Potential $12bn Deal

 

Deal Snapshot: The addition of Hengrui's HRS-9821, a China-originated fast-follower of Verona’s Ohtuvayre in chronic obstructive pulmonary disease, should enable GSK’s COPD therapy portfolio to stack up well against increasing competitors in the indication, including biologics and small molecules.

Deal Watch: Novartis Hopes To Ace Inflammatory Disease With Matchpoint Tie-Up

 

Plus deals involving Lilly/Gate Bioscience, Concentra/iTeos, Nicox/Kowa, Ajax/Schrodinger, I-Mab/Bridge Health, Otsuka/Cantargia, JCR/Acumen and more.

Gateway To Africa: Natco Bids For 35.75% Of Adcock Ingram

 

Natco to buy out Adcock Ingram’s minority shareholders in what’s possibly its biggest M&A investment, opening up substantial opportunities in South Africa and the region. If the offer goes through, it will result in the delisting of Adcock, with Bidvest and Natco co-owning the firm.

More from Business

Private Equity Targets Bavarian Nordic But Major Investor Balks

 
• By 

After “intense negotiations”, Bavarian Nordic’s board plans to recommend a DKK19bn ($2.98bn) offer by private equity firms Nordic Capital and Permira to take the company private.

Dr Reddy’s On Semaglutide Prospects, Capacity And There’s An IP Hearing To Watch

 

Dr Reddy’s CEO discusses the growth opportunity for semaglutide, including production capacity and ‘crazy’ demand indications, and a potential 20-plus product GLP-1 portfolio. All eyes are also on an upcoming hearing in India pertaining to Novo Nordisk’s semaglutide patent in the country.

GSK Gains Hengrui’s PDE3/4 Inhibitor, Options For 11 Early Assets In Potential $12bn Deal

 

Deal Snapshot: The addition of Hengrui's HRS-9821, a China-originated fast-follower of Verona’s Ohtuvayre in chronic obstructive pulmonary disease, should enable GSK’s COPD therapy portfolio to stack up well against increasing competitors in the indication, including biologics and small molecules.