Finance Watch: Have Investors Reached IPO Fatigue?

Only Two Of Six Newly Public Companies Trade Above IPO Price

Public Company Edition: Codiak, Kiromic, Aligos and Opthea have fallen below their initial public offering values, while Tarsus and Praxis are trading higher. Also, 5AM, MPM and Cormorant took biotech SPACs public and Evotec led recent non-IPO financings with a €250m private placement.

Initial public offerings in the US have been remarkable in 2020 with 70 biopharmaceutical company IPOs so far this year compared with the full-year 2019 total of 50 first-time offerings. However, while the average return for drug developers that went public during the first three quarters of this year generated an average return well into the double digits, only two out of six firms that went public since 13 October have generated a positive return for IPO investors.

It remains to be seen whether this recent micro trend in biopharma IPO performance is a sign that investors are...