“Today, early-stage cancer and rare disease therapeutics companies are finding a receptive environment, even when they are years away from having products or sales.”
The life sciences IPO market continued to heat up as six life sciences companies completed IPOs in July with five of those new issues debuting in a single week, the busiest week for biotech IPOs in more than 13 years.
The last time so many companies completed initial public offerings in the sector in a single week was the week of February 7, 2000, when seven life sciences companies completed IPOs.
In all, 29 life sciences companies raised a total of $5 billion on U.S. exchanges through the first seven months of 2013. That compares to 11 companies raising $771 million during the same period a year ago. Even excluding the $2.6 billion IPO of Pfizer’s animal health spin-out Zoetis, the sector is seeing its most robust period for IPOs since 2000. A total of 24 life sciences companies are in registration in the United States with four companies added to the IPO queue in July. The number does not include companies that may have filed confidentially under the JOBS Act.
For a long time, general investors were reticent to invest in the biotech sector because of uncertainties overhanging the industry. But now, driven by the strong performance of the sector as a result of clinical and market successes, investors are embracing the biotech sector.
The IPO activity reflects a significant shift in attitude among investors, driven in part by large pharmaceutical companies chasing rare disease and cancer assets. Heading into this year, companies seeking to go public needed revenue or products ready to enter the marketplace to garner investor interest. Today, early-stage cancer and rare disease therapeutics companies are finding a receptive environment, even when they are years away from having products or sales.
An analysis by The Burrill Report of all IPOs on U.S. markets in 2013 based on data from S&P Capital IQ shows life sciences issues outperformed IPOs in all other sectors through the end of July with an average return of 40.5 percent. That was driven by four rare disease therapeutics companies that rose an average of 72 percent and eight cancer therapeutics companies that jumped 70 percent during the period. Interest in rare disease and cancer therapeutics companies has been ignited by Roche’s pursuit of the rare disease therapeutics company Alexion Pharmaceuticals and Onyx Pharmaceuticals rejection of an unsolicited $10 billion bid from Amgen. It is now being pursued by several Big Pharmas.
August 02, 2013
http://www.burrillreport.com/article-summer_heatwave_for_ipos.html