The market for biopharmaceutical company initial public offerings and follow-on public offerings has become more friendly this year, but some firms still are circumventing the public offering route and pursuing private investment in public equity (PIPE) financings to extend their cash runways. Denali Therapeutics Inc., Avidity Biosciences, Inc., Crinetics Pharmaceuticals, Inc. and Ocular Therapeutix, Inc. recently cashed in, grossing nearly $1.6bn between them from PIPE investors.
A PIPE lets companies set the price in their fundraising with input from only a handful of investors agreeing to participate in the financing based on the disclosure of certain material, non-public information, whereas a follow-on public offering (FOPO) is subject to the whims of the stock market – although after a high-value transaction or positive clinical trial readout, those whims can be lucrative
