The Indomitable Biotech IPO Window

What’s keeping it Open?

Mark Edwards Mark Edwards
$100M+ corporate alliances appear largely responsible for something that has eluded the biopharma industry over four decades – a sustainable path to investor liquidity via IPO.
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There’s a longstanding adage in the biopharma industry that biotech initial public offering (IPO) windows creak open but slam shut. After seven years of capital markets being receptive to biotech public financings, one might have predicted that the industry’s IPO window would be a casualty of the Covid-19 pandemic. Way wrong!

As shown in Figures 1 & 2, the 53 biotech IPOs on US exchanges year-to-date (YTD) have just surpassed all of 2019 in quantity, and have roughly doubled the aggregate amount raised last year. Even more impressive is that the median IPO proceeds of $178M per IPO are more than double the highest level seen in prior years (Figure 3), and the median post-IPO market capitalization of $658M per biotech is 50+% higher than previously seen (Figure 4).

To understand what is keeping this IPO window open, we took a look back at the approximately 450 companies that have successfully gone public since January 2013. As listed in Table 1, we tested three hypotheses: (1) Insider participations in IPOs are motivating bankers with outsized transaction fees; (2) Public concerns with infectious diseases, most recently the Covid-19 pandemic, are provoking a flurry of new entrants in these areas; and (3) Substantial collaborations ($100M+ corporate alliances) and acquisitions are providing sustained resources to augment product development & commercialization.


For purposes of this analysis, we looked at all IPOs on US stock exchanges since January 2013 (“the 2013-20 IPO Class”). We found 447 through August 21, 2020, the date that Kymera Therapeutics became the 53rd biotech IPO of 2020. The key financial and other elements (e.g. most advanced stage, technology, therapeutic area) for each offering are shown in the Biotech IPOs spreadsheet accompanying this article. This spreadsheet also has links to each IPO offering document on the SEC’s EDGAR website.

In addition, the “Alliances” tab of the Biotech IPOs spreadsheet lists the most significant $100M+ corporate alliance (as measured by total potential alliance payments) announced by each biotech company before (“pre-IPO”) or after (“post-IPO”) the pricing of its IPO. This tab also lists the acquirer and acquisition valuation of the 40 companies from the 2013-20 IPO Class that have been acquired since going public. Subscribers to may also access the deal press release, financial notes disclosures and/or full deal contract(s) by following the “Deal” link for each alliance or acquisition.

Insider Participations

In January of 2018 we published an article entitled “The Best Biotech IPO Window … that Money Can Buy.” This analysis suggested that the prevalence of insider participations in biotech IPOs might well account for the longevity of the biotech IPO window, then entering its sixth year. However, as shown in Figure 5, over the past two years biotech IPOs have become far less reliant on insider participations. For IPOs in 2020, for example, only 10 of 53 offerings had insider participations, and these accounted for only $300M of roughly $12B in aggregate IPO proceeds.

Infectious Disease Focus

Table 2 shows the primary therapeutic focus of companies in the 2013-20 IPO Class at the time of their IPO. 124 companies (28%) were in the clinic with cancer compounds or developing such compounds on the basis of mechanism of action (MOA). An additional 94 companies (21%) were similarly engaged in clinical or MOA-based drug development with respect to CNS, hematologic or genetic/orphan diseases.

30 biotechs (7%) were primarily focused on anti-infectives at the time of IPO. If one adds those companies in autoimmune, inflammatory and respiratory diseases, any of which might easily pivot to infectious diseases, plus 28 diagnostic companies, that still only accounts for 19% of the total 2013-20 IPO Class.

Substantial Collaborations & Acquisitions

Figure 6 shows the aggregate, average and median deal values of pre-IPO, post-IPO and acquisition deals involving the 2013-20 IPO Class. The individual deals are listed in the Alliances tab of the Biotech IPOs spreadsheet. As an example, Figure 7 is a snapshot of the most recent such alliance – the $2.3 billion pre-IPO deal between Kymera and Sanofi. (We’ve attached deal snapshots for the dozen most recent such pre-IPO alliances here.)

To put the aggregate amounts in context, the aggregate amount of IPO proceeds raised between 2013 and 2020 YTD is $49.4 billion. The $85.9B in aggregate pre-IPO potential alliance payments plus $113.2B such payments for alliances commenced post-IPO are collectively 300% more than all IPO proceeds over the past 7.5 years. Similarly, the $83.8B in acquisition payments for 40 2013-20 IPO Class members represent aggregate cash returns to investors of 70% more than all biotech IPO proceeds since 2013.

Finally, as confirmation of the contribution of $100M+ alliances to the sustained longevity of the biotech IPO window, we looked at the 2013-20 IPO Class versus all other biotech companies’ presence as licensors in $100M+ alliances over the past nine years. As shown in Figure 8, 2013-20 IPO Class companies have garnered roughly one-third of all potential alliance payments in major alliances announced within the entire biopharma industry since 2012.


While corporate alliances have always been integral to the growth of the biopharma industry, the size, number and participation in such alliances by private and newly public biotech companies appears largely responsible for the creation of something that has eluded the industry over the past four decades – a sustainable path to investor liquidity via IPO.