#4: IPO MARKET: Revival at Last

#4: IPO MARKET: Revival at Last

The initial public offering (IPO) market finally delivered on years of revival hype by roaring back in 2013, with no less than 55 therapeutic, diagnostic, and industrial/agricultural biopharma companies going public this year as of December 10. According to data by Burrill & Co., they raised a combined $6.236 billion, one third of which came from the year’s single largest IPO, Zoetis, Pfizer’s animal-care spinout, with more than $2.2 billion raised. Zoetis was followed by CRO Quintiles ($525 million raised); and eye disease drug developer Ophthotech ($167 million).

“A lot more money is coming into the sector,” Edward Ahn, Ph.D, managing director and CSO of MedCap Advisors, told GEN. The revival of the overall market was definitely one factor, since it brought more generalist investors back to make investments, he said. Yet investors also responded to FDA’s quickening pace of review and decisions on new drugs, aided by last year’s enactment of the 2012 Food and Drug Administration Safety and Innovation Act; and what Dr. Ahn said was a scarcity of quality companies in which to invest.

He said another factor in the IPO revival was the Jumpstart Our Businesses (JOBS) Act, whose provisions include a five-year exemption from the Sarbanes-Oxley Act and confidential IPO pricing for smaller companies issuing their first public shares: “The regulations have really helped some small companies take their company public.”

 

 

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