More biopharmaceutical companies have gone public in the US during 2021 than in 2020, breaking the record set last year with a quarter left to go, but the momentum may slow in the fourth quarter now that returns generated by this year’s crop of newly public firms has turned negative. The 88 companies that went public through the third quarter of this year delivered a 4% loss, on average as of 4 October.
Returns have been falling all year, with the 32 companies that went public in the first quarter delivering an 11% average return as of 1 April, while the average return fell to just 1.1% by 1 July for the 62 companies that priced IPOs through the end of Q2. (Also see "IPO Update: Booming Biopharma On Pace For Another Record Year" - Scrip, 2 July, 2021.) Biopharma companies fared better in 2020 when the 58 companies that went public during the first three quarters delivered a 49.4% average return as of 5 October of last year. (Also see "IPO Update: 58 Drug Developers Raised $12.5bn Through Q3" - Scrip, 6 October, 2020
How Does Biopharma Compare?
Nasdaq Biotechnology Index (NBI) performance this year has significantly underperformed compared with the broader Nasdaq and the S&P 500. Year-to-date increases as of 4 October are:
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