IPOs

The best — and worst — biotech IPOs in the class of 2017

When we started out this year, several analysts remarked that 2017 would basically be OK for biotech IPOs. Nothing like the go-go days of 2014, of course, but equal to or slightly better than the so-so 28 that scored in 2016.

At this stage of the game, those early forecasts appear to be right on the money — with a shot at being a bit conservative. And some standout successes on the IPO front are likely to continue to drive new offerings that are creating billions of dollars of shareholder value in these fledgling drug companies.

Independent biotech investor Brad Loncar assembled a look at the 22 biotech IPOs he’s tracked year-to-date, close to 8 months in, as a surge over the past few months has pointed the industry to a likely finish ahead of 2016.

I’d like to highlight here, though, that IPO forecasts can be devilishly tricky, with the biotech IPO window likely to fly open or shut fast based on factors far beyond anything in the industry’s control. But it’s definitely cracked open for some ambitious players, provided they understand what’s needed to make an IPO fly.

I asked Loncar what he thought of the biotech IPO market so far in 2017. He sized it up this way:

In general, I think this has been a more difficult year for IPOs than in previous years.  It seems that the deals that are getting done have required a significant amount of insider participation to succeed, or they are European companies and/or spin-offs that the market is already familiar with.  You aren’t seeing investors throwing money at new companies blindly like you do in peak years, and I guess that is a good thing of course.

A total of 16 of 22 biotech IPOs are now priced at a higher mark than their debut, a solid indicator of success. Among the standouts:

BeyondSpring Pharmaceutical $BYSI : $20; $431 million valuation: Today – $38.41, up 92%

Akcea Therapeutics $AKCA: $8 $520 million valuation: $15.08, up 88%

Biohaven $BHVN: $17; $646 million valuation: Today — $30.33, up 78%

Dova Pharmaceuticals $DOVA: $17, $447 million valuation: Today $26.33, up 55%

Athenex $ATNX: $11; 655 million valuation: Today $16, up 45%

Among the worst:

Ovid $OVID: $15; $399 million valuation: Today: $6.64, down 56%

ObsEva $OBSV: $15; $444 million: Today $7.74, down 48%

Zymeworks $ZYME: $13, $354 million: Today $7.10, down 45%


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