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Three drug startups collectively raised more than $700 million in initial public offerings Thursday, a flurry of activity after a largely fallow summer in which few biotechnology companies made the jump to public markets.
Cancer biotech Bicara Therapeutics secured $315 million in the third-largest IPO of the year, according to BioPharma Dive data. Autoimmune drug developer Zenas BioPharma followed with a $225 million stock sale, while MBX Biosciences, which is studying endocrine and metabolic conditions including obesity, raised $163 million.
All three met projections they set the past few weeks. Bicara hiked its offering size by 25% before pricing and still sold more shares than anticipated. Zenas and MBX upsized their IPOs as well.
The trio of offerings is a notable occurrence this year. So far, 18 biotechs have now priced IPOs in 2024, in line with each of the prior two years but well below pre-pandemic totals. More than half currently trade below their offering price, BioPharma Dive data show.
As in the past two years, lengthy dry spells have followed bursts of IPO activity. Prior to Thursday, the last time three biotechs went public in the same week was in early February, when cell therapy developer Kyverna Therapeutics, gene editing company Metagenomi and anti-aging startup Telomir Pharmaceuticals raised about $420 million over two days.
By and large, the companies making it to an IPO have been later-stage, with drugs already in human testing. But even for those firms, the market remains challenging and, in recent months, there have been more buyout deals for private biotechs than IPOs. The pattern suggests young drugmakers and their backers are opting to sell, while pharmaceutical companies are finding bargains in mature startups that aren’t yet public.
Even with the spike in private acquisitions, there is a backlog of startups that are relying on later funding rounds to stay afloat and wait for the right opportunity. Their arrival onto the market may be delayed by U.S. elections in November and uncertainty around interest rates, however.
“We don’t anticipate a rapid recovery until the dust settles on macro uncertainties, but expect to see an uptick in companies going public in early '25,” wrote Jefferies analyst Michael Yee in an investor note this summer.
The IPOs Thursday may offer a glimpse of what’s to come. All three secured hundreds of millions of dollars in venture investment prior to testing Wall Street, and each has drug prospects in Phase 1 testing or later.