Last year was a record IPO year with 72 biopharmaceutical IPOs raising approximately $8.4 billion in IPO proceeds. IPOs were off to a slower start during the first few months of 2019 due to the government shut down from December 22, 2018 to January 25, 2019. For the first half of the year, there have been 30 biopharmaceutical IPOs, raising $2.9 billion in IPO proceeds and the median offering amount priced at $80 million.
With investors applying pressure on the IPO pricing outcomes, there continues to be strong momentum. Last year, 70% of healthcare listed companies priced within their IPO range, 16% above range and 14% below range. The first half of 2019 has seen 68% of IPOs price within range, 18% above range and 14% below range.
Uncertainty around geopolitical landscape was a factor in the markets for first half of the year. However, the Volatility Index continues to trend downward and has decreased 41% in the first half of 2019. As the presidential election cycle approaches, there is political risk around the candidates' views on specific healthcare topics such as drug pricing that could potentially cause headwinds in the market for healthcare stocks.
The healthcare IPO aftermarket has been subdued with the median offer-to-close price performance at 3% . Investors willing to take a long-term view on biopharmaceutical IPOs remain bullish. We continue to see advancements in new technologies and rapid growth of genomic medicine since the mapping of the human genome. Due to multiyear timelines in which biopharmaceutical companies navigate the drug development process in hopes of receiving FDA approval, it’s more appropriate to take a longer term view when measuring their success rather than looking at day-one stock performance.
In the first half of 2019, we listed 41 healthcare IPOs of which 6 healthcare companies have an IPO market cap of over $1 billion and total IPO proceeds of $4.6 billion.Jordan Saxe, Head of Healthcare Listings at Nasdaq
Our results for the first half of 2019 speak to the long-term commitment we have to our healthcare listed companies. We’re with them throughout their growth journey, and we look forward to continuing the momentum.
Nasdaq Biotechnology Index:
Nasdaq has a thriving index business for listed companies to gain exposure to passive investors, which includes the Nasdaq Biotechnology Index (NBI), a market capitalization weighted index focused specifically on the biopharmaceutical industry. The NBI consists of 221 biotech stocks listed on Nasdaq. Since its inception in 1993 to May 30, 2019, NBI is up 1,498.11 %, with an estimated AUM of $8.02B USD in the largest ETF tracking the Index as of March 29, 2019.
Biotech News and M&A Insights:
Merck recently reached a deal to acquire Peloton Therapeutics during their IPO roadshow, and its Phase 3-ready kidney cancer drug, for $1.05 billion. Investors could potentially receive another $1.15 billion in milestone payments. This trend of pre-IPO M&A is likely to continue into the second half of 2019.
At a recent event held at JLABS in south San Francisco, Josh Kolins, Nasdaq Head of Healthcare Advisory Services, and Michael Stiller, Global Co-head of Strategic Capital Intelligence, provided capital markets trends in the biotech industry. They discussed high-level biotech industry trends over the past couple of years.
- For the first half of 2019, the biotech industry has witnessed a strong start to M&A with current average deal value at $3.4 billion, well above the $1.7 billion in 2018.
- Drug approvals are on the upswing since the FDA has become more accommodative under recent FDA Commissioner Scott Gottlieb. There were a record number of approvals in 2017 and 2018.
- Nasdaq Biotechnology Index short-interest is currently trending higher from ongoing headline risk.
Nasdaq will see more merger and acquisition activity from the larger companies as they look for growth opportunities to augment their internal clinical pipelines.
To learn about healthcare listings at Nasdaq, visit https://www.nasdaq.com/solutions/biotech-and-healthcare-listings, or contact me at Jordan.Saxe@nasdaq.com. For more information on advisory services trends in the biotech industry, please feel free to contact Joshua.Kolins@nasdaq.com and Michael.Stiller@nasdaq.com.
Healthcare companies that listed on Nasdaq during the first half of 2019 (ordered by recent IPO Date):
- Karuna Therapeutics, Inc.
- Adaptive Biotechnologies Corp.
- Morphic Holding, Inc.
- Akero Therapeutics, Inc.
- BridgeBio Pharma, Inc.
- Atreca, Inc.
- Prevail Therapeutics, Inc.
- Personalis, Inc.
- Stoke Therapeutics, Inc.
- Bicycle Therapeutics
- IDEAYA Biosciences, Inc.
- Applied Therapeutics, Inc.
- Axcella Health, Inc.
- Cortexyme, Inc.
- Milestone Pharmaceuticals, Inc.
- NextCure, Inc.
- Transmecis Group, Inc
- Hookipa Pharma, Inc.
- Turning Point Therapeutics, Inc.
- Change Healthcare, Inc.
- Silk Road Medical, Inc.
- Precision BioSciences, Inc.
- Genfit SA Sponsored ADR
- Shockwave Medical, Inc.
- Avedro, Inc.
- Kaleido Biosciences, Inc.
- Alector, Inc.
- Anchiano Therapeutics
- Stealth Biotherapeutics Corp.
- TCR2 Therapeutics, Inc.
- Harpoon Therapeutics, Inc.
- Gossamer Bio, Inc.
- Guardion Health Sciences, Inc.
- Hoth Therapeutics, Inc.
- NGM Biopharmaceuticals, Inc.
- IMAC Holdings, Inc.
- Trevi Therapeutics, Inc.
- Immune Bio, Inc.
- Soliton, Inc.
- China Sxt Pharmaceuticals, Inc
Jordan B. Saxe is Head of Healthcare Listings 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.
The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding sector and strategy performance are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.