Nasdaq: What is the current market environment for biotech initial public offerings and biotech listings overall?
Saxe: I expect that 2018 will demonstrate positive momentum for biotech listings overall, and specifically on Nasdaq. We predict 30-plus biotech IPOs this year and a strong first half of 2018 performance leading into midterm elections. Overall, the biotech industry is showing strong signs of momentum. Private healthcare companies continue to see demand from cross-over investors who also participate in the public markets. I also believe that Series A rounds will be larger in 2018, on average.
As private market valuations continue to increase, the biotechnology industry remains attractive. Nasdaq is actively talking to companies that are either confidentially on file with the SEC or are ready to start the IPO process. The next wave of biotech IPOs will provide insights into investor appetite for future demand for healthcare and biotechnology IPOs.
Nasdaq: Are there any regions that show the most potential in 2018? What is Nasdaq’s outlook for new listings within the biotech sector?
Saxe: Outside of the traditional biotech hubs, we have seen the Asia-Pacific region driving the global biotechnology story. For example, recently Taiwan Liposome Company and China SXT Pharmaceuticals became the first Chinese biotech companies to file for a U.S. listing. The biotech IPO forecast remains strong globally. And here in the U.S., Nasdaq has twice as many healthcare IPOs year-to-date compared to the same period in 2017. Nasdaq continues to be a leader in biotechnology listings overall. Currently 357 biotech companies are listed on Nasdaq. 94% of biotech companies listed on a U.S. exchange are on Nasdaq.
This year’s healthcare IPOs that came to Nasdaq include Cue Biopharma, Menlo Therapeutics, Eyenovia, Solid Biosciences, ARMO Biosciences, resTORbio, and BioXcel Therapeutics. Homology Medicines and UNUM Therapeutics recently filed IPOs in addition to Taiwan Liposome Company, Ltd. and China SXT Pharmaceuticals.
Nasdaq: How has biotech IPO performance been recently? What are trends in the sector?
Saxe: Biotech IPOs are usually very strong performers, based on historical performance. Over the past two years, the Nasdaq Biotechnology Index is up 27.03%. This year, biotech IPOs are up an average of 31.64%. Furthermore, 78% of 2018 biotech IPOs have priced within or above their indicated range. All sizes of biotech IPOs have performed well, from small to large capital raises. ARMO Biosciences raised $128 million from their recent IPO and Cue Biopharma raised $66.2 million.
Nasdaq: What should we expect from merger and acquisition trends this year? How will they influence the biopharma industry?
Saxe: I expect to see a ripe environment for M&A activity this year, partly driven by tax repatriation. The business-friendly tax package is making it feasible for biotech companies to repatriate cash overseas, which should drive more mergers and acquisitions. There have been various large deals within the sector. For example, Sanofi recently announced it is acquiring Bioverativ for $11.6 billion and Ablynx for $4.8 billion. Also, Celgene announced it is acquiring for Juno Therapeutics for $9 billion. I think we will see more M&A activity from the larger players as they look for growth opportunities. These companies might be looking to augment their internal clinical pipelines with mergers or acquisitions.
Nasdaq: You mentioned a few biotech companies above who have listed on Nasdaq. What has their experience been like?
Eyenovia’s January 30 IPO raised $27 million; the company develops microformulations of common eye therapies. resTORbio, which develops therapeutics for treating aging-related diseases, raised $85 million from their IPO on January 26. Both companies celebrated their public debut with Nasdaq bell ceremonies and first trade viewings at the Nasdaq MarketSite in Times Square, New York.
For more information about biotechnology listings at Nasdaq, contact Jordan at Jordan.Saxe@nasdaq.com.
resTORbio CEO Chen Schor (second from left) and his team visited the Nasdaq Stock Market for their initial public offering.
Nasdaq recently welcomed Eyenovia (Nasdaq: EYEN) to the Nasdaq Stock Market
Nasdaq welcomed Eyenovia CEO Sean Ianchulev (fifth from right) and his team to the Nasdaq Stock Market.
Peter Van Vlasselear, CEO of ARMO BioSciences, and his team celebrated ARMO BioSciences IPO at Nasdaq’s Closing Bell.
Jordan B. Saxe is Senior Managing Director, Listing Services at Nasdaq. He is responsible for leading business development efforts in the healthcare sector, and brings over thirteen years of experience within the exchange field. He has advised over 200 IPOs and has worked closely with venture capital, private equity and investment firms to educate them on the liquidity options Nasdaq can provide. He holds a B.S. in Business Administration from the University of Vermont.
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