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Last year, a total of 67 biopharma and medtech companies completed initial public offerings (IPOs), raising for $8.55bn combined.

Medical device startup Envista Holdings brought in $643.7m in the largest IPO among all biopharma and medtech firms. The firm had been Danaher Corp.'s dental subsidiary; however, following the offering the companies began operating as separate public entities. Envista is organized through two operating segments: specialty products and technologies, and equipment and consumables.

Leading the pack in the biopharma sector was Denmark-based Genmab, which raised over half a billion dollars. The 20-year-old biotech had already been selling shares on the Nasdaq Copenhagen exchange. In July 2019, Genmab raised $549.8m in its IPO of American Depositary Shares on the Nasdaq Global Market. The cancer-focused firm has two marketed products: Darzalex (daratumumab) for multiple myeloma (partnered with Johnson & Johnson); and Arzerra (ofatumumab) for chronic lymphocytic leukemia (partnered with Novartis). IPO proceeds will support the company’s development pipeline led by tisotumab vedotin, an antibody-drug conjugate (ADC) targeted to tissue factor that is in Phase II trials under a deal with Seattle Genetics for cervical cancer and other solid tumors.

Additional funds will support discovery and development efforts on other candidates, including enapotamab vedotin, an ADC targeting Axl in Phase I/II trials for ovarian, cervical, endometrial, thyroid, and non-small cell lung cancers, as well as melanoma and sarcoma; HexaBody-DR5/DR5 (Phase I/II for colorectal, non-small cell lung, triple-negative breast, renal cell, and urothelial cancers); DuoBody-CD3xCD20 (Phase I/II for B-cell malignancies including diffuse large B-cell lymphoma, high-grade B-cell lymphoma, primary mediastinal large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma, small lymphocytic lymphoma, and marginal zone lymphoma); and other projects. The company brought in $455m in revenues for 2018, driven largely by sales of Darzalex.

Startup firms – companies founded within the last four years – were well represented in completed IPOs last year. Not only did Envista take the top spot, but 24 other recently founded firms, all biopharma, went public in 2019. Biopharma startups raised $2.54bn in IPO proceeds, accounting for 30% of the total 2019 funding. Leading that group was BridgeBio, which raised $372.7m. The firm is developing therapies for rare genetic diseases, and its pipeline includes over 15 candidates in the areas of Mendelian diseases, oncology and gene therapy. Lead programs are BBP-265 for ATTR-CM, BBP-870 for molybdenum cofactor deficiency (MoCD) type A, and BBP-009 in Gorlin syndrome.

Going public is likely a reasonable financing route for young companies with later-stage R&D programs or with technology platforms that are generating more candidates than they can develop on their own with just venture capital funding. Several gene and cell therapy companies like BridgeBio also have taken advantage of high investor interest in their potentially curative medicines by going public, which provides them with a significant amount of funding to progress their R&D programs faster and at the same time, instead of advancing just one at a time. In 2019, four gene therapy startups completed IPOs, while four other non-startups went public.

A big disadvantage of going public is the added cost of keeping investors informed and keeping compliant with financial disclosures and other regulatory requirements for public companies. Some CEOs see these responsibilities as costly and consider them a distraction from their R&D priorities.

There is a lot of money chasing biopharmaceutical opportunities right now, so there are plenty of investors to fund startups as they grow, whether they go public or stay private. Big venture capital mega-rounds seem to be more and more common, including series B and C rounds, and beyond, to help startups grow and get to value inflection points.

 

 



Initial Public Offerings for Biopharma Start-Ups in 2019

Company

IPO Date

Area(s) of Focus

Proceeds ($m)

BridgeBio Pharma

June

Cancer/Cardio/Metabolic/CNS/Dermatology

372.7

Gossamer Bio

Feb.

Cancer/Cardio/GI/Immune/Respiratory

295.2

Phathom Pharmaceuticals

Oct.

GI

194.3

SpringWorks Therapeutics

Sept.

Cancer/CNS

173.3

Viela Bio

Oct.

Immune/Inflammation/CNS/Ophthalmic

160.5

Vir Biotechnology

Oct.

Infectious

132.9

Prevail Therapeutics

June

CNS

116.3

Akero Therapeutics

June

Hepatic/Metabolic

98.4

Morphic Therapeutic

June

Cancer/GI/Hepatic/Immune

96.3

89bio

Nov.

Hepatic/Metabolic

90.8

Oyster Point Pharma

Oct.

Ophthalmic

85.6

TCR2 Therapeutics

Feb.

Cancer

80.2

NextCure

May

Cancer

80.2

Satsuma Pharmaceuticals

Sept.

CNS

76.7

Harpoon Therapeutics

Feb.

Cancer

75.1

Kaleido Biosciences

Feb.

Cancer/Cardio/Hepatic/Metabolic/GI/Infectious

69.8

Mirum Pharmaceuticals

July

Hepatic

69.8

Cabaletta Bio

Oct.

Blood/Dermatology/Immune

69.6

Fulcrum Therapeutics

July

Blood/Cardio/Musculoskeletal/CNS

67.0

IDEAYA Biosciences

May

Cancer

53.5

Applied Therapeutics

May

Cardio/Metabolic/Ophthalmic

37.2

RAPT Therapeutics

Nov.

Cancer

33.5

CNS Pharmaceuticals

Nov.

Cancer/CNS

7.9

Hoth Therapeutics

Feb.

Dermatology

6.5

 

 

Total Raised:

$2,543.3m

 

Source: Strategic Transactions | Informa, 2020

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