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July 1, 2019

Investor interest in biologics continues: Three hefty $100m+ biologic IPOs in May alone

Biologics companies are increasingly coming to market with their pipelines at an earlier stage of development, revealing that investors are willing to take risks.

By GlobalData Healthcare

Among a flurry of bio/pharma initial public offerings (IPOs) in May 2019, three biologics companies (including gene therapy) filed for $100m+ IPOs, reflecting huge investor confidence in the segment’s growth potential.

Biologics investment 2019

May 2019 had an exceptionally high number of bio/pharma IPO filings (16) compared to previous months, according to GlobalData’s Deals Database, making up for the year suffering a slow start in Q1 (see Figure 1), when the temporary federal government shutdown slowed the market (B/POR, January 2019).

Table 1 shows the top ten $100m+ IPOs filed in the first half of 2019.

Biologic IPOs account for a number of the high valued IPOs in May 2019. Most notably, at the end of May, MabPharm (Zhejiang, China), a company developing biologics for cancer and autoimmune diseases, announced plans to raise $149.72m.

This was followed by the preclinical monoclonal antibody biotech Atreca (Redwood City, CA, US), announcing its IPO valued at $132.3m. Finally, gene therapy company Prevail Therapeutics (New York, NY, US), filed for a $100m IPO.

Interestingly, biologic companies are increasingly coming to market with their pipelines at an earlier stage of development, revealing that investors are willing to take risks for the opportunities offered by biologics.

For example, of the three $100m+ biologic IPOs in May, not a single company had a drug on the market., MabPharm’s, Prevail’s, and Atreca’s highest development drugs are in, Phase I, IND/CTA Filed, and Preclinical stages respectively.

Figure 2: Number of Biologic IPOs and average deal value ($m) from 2012–2019

The biologic market is set to grow, with biologic drug sales forecast to increase from $239bn in 2018 to $493bn by 2025, representing a compound annual growth rate of 11%, according to GlobalData’s Drug Sales and Consensus Forecast (DSCF) Database.

Furthermore, with biologics making up 41% of pipeline drugs, combined with investor understanding of these drugs’ potential and ongoing attractive IPO conditions across all markets, we can expect to see further biologic IPOs in the very near future.

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