Arlene Weintraub writing for Forbes magazine interviewed Nelson Griggs and Jordan Saxe on the Biotech and Healthcare sectors. Here's a portion of that interview from Forbes.com.
Yesterday early-stage biotech companies Apellis and InflaRX both went public, raising $150 million and $100 million respectively. Today we should see the Wall Street debut of Erytech Pharma, which is expected to raise $100 million.
That will bring the biotech IPO tally for 2017 to 30 so far—handily outpacing the final tally for 2016 of 26. The amount of money raised in biotech IPOs this year is more than $1.9 billion, again surpassing last year, when biotechs raised $1.7 billion.
The environment is ripe for more biotech companies to go public in the coming months, predicted Nelson Griggs, president of Nasdaq Stock Exchange, and Jordan Saxe, senior managing director and head of healthcare capital markets at the exchange, in an interview. Here are edited excerpts from our conversation.
Arlene Weintraub: Biotech IPOs slowed down a bit earlier this year but seem to be experiencing a resurgence following a few notable acquisitions, including Gilead’s $11.9 billion purchase of CAR-T company Kite Pharma. How important has M&A been to fueling biotech IPOs?
Jordan Saxe: Kite Pharma really reinvigorated the investor appetite in biotech, because it shows that we’re seeing great exits. All of these biotechs want to have a great outcome and really cure disease, but they’re also looking for strategic financing. So the hope is to go public, and then once their clinical data is proven, they can get acquired. We’re starting to see that path be proven, and that’s given a lot of these companies in the IPO pipeline more ambition and hope for M&A.
Weintraub: At the same time, the obstacles to going public can be steep, particularly for small companies. What can be done to alleviate these challenges?
Nelson Griggs: When you look at the regulations that are put on companies, we say the pendulum has swung a bit too far. It has become fairly costly for companies, especially ones that are smaller in size, to really keep up with the pace of the regulatory demands. One of my main jobs is to speak to companies throughout the entire country, and definitely the proxy process has come up quite a bit over say the last four or five years as something that is ripe for some reform. The other big issue that impacts a smaller sized company is transparency around their trading. So today there’s a long disclosure but no short disclosure. Those are two areas I highlight. But if you look at the overall blueprint, I’d say there’s about 20 items or so that we need to chip away at so it’s not so burdensome to be a public company. That would certainly help the biotech community.
Read the entire article on the Forbes website here >
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