The Burrill Report

Eight biotech companies completed IPOs on U.S. exchanges in the first week of February, collectively raising $490 million. It was the largest number biotech IPOs in one week in the past 14 years, rivaling the eight biotechs that completed IPOs during the second week of February in 2000. Since the beginning of the year, 14 companies have raised $921 million in initial public offerings on U.S. exchanges, including two European companies. Outside the United States, there have been three IPOs so far this year, one each in Taiwan, China, and Japan, with Seattle-based Acucela, completing its IPO on the Tokyo stock exchange on February 4, raising $162.4 million.

Of the 14 biotechs that have gone public in the United States in 2014, one is a diagnostic company and 13 are drug developers, including five companies focused on therapies for rare diseases with two of them developing gene therapy treatments. They have returned on average 23 percent since their IPOs, with an average first day return of 29 percent. Most of this pop, however, occurred at the end of January when Dicerna Pharmaceuticals gained 203.3 percent in its first day of trading and Ultragenyx Pharmaceutical gained 101.2 percent. Both companies are focused on rare disease therapies. At the end of the week, seven companies were trading above their offering price and five were trading below, with two unchanged.

As a group, these companies priced their offerings 11.9 percent below the midpoint of their target range, sold 23.1 percent more shares than they had expected, and raised 3.9 percent more than what they had hoped to raise. These numbers compare favorably to the 52 life sciences IPOs completed in 2013. As a group, they priced their offerings on average 16.8 percent below the midpoint of their target range, and sold 29 percent more shares than they had expected, and raised just 0.7 percent more than what they had hoped to raise.

More importantly, several companies that went public in 2013 were among a slew of biotech companies that advantage of strong share prices to raise $1.7 billion in follow-on offerings since the beginning of 2014. Receptos, Acceleron Pharma, NanoString Technologies, Aratana Therapeutics, and Epizyme have collectively raised $496 million over the past four weeks.

The biotech IPO deluge is expected to continue for another week as five to six biotech companies are expected to price by Valentine’s Day. As long as biotech in general continues its strong performance, investors will welcome more new offerings.


February 07, 2014
http://www.burrillreport.com/article-banner_week_for_biotech_ipos_in_u_s_.html