U.S.-Listed Biotech Firms Have Raised Over $9 Billion In IPOs This Year


U.S. biotech firms have raised roughly $9.4 billion in IPOs, the biggest amount since 1995, $3 Billion more than 2018.

Not only has Biotech firms raised billion of dollars, but this year’s biotech IPOs have shown average gains of 34% on their first day of trading. (biggest first-day gains for the sector since the tech boom of 2000). Additionally, biotech companies have released more shares following their IPOs and raised more than $32 billion in follow-on offerings, already the most ever in a year, according to Dealogic.

The Nasdaq Biotechnology Index is up 13% so far this year, compared with the S&P 500’s 3.7% rise. In June the exchange-traded fund issuer ETFMG launched a product that focuses specifically on companies engaged in the testing and treatments of infectious diseases under the ticker GERM.

One company touting a vaccine candidate is Moderna which has seen its valuation rise to nearly $30 billion, up from roughly $7 billion this year. Phase 3 trial have begun for Moderna's Covid-19 vaccine, which was codesigned with the National Institute of Allergy and Infectious Diseases.

A German biotech company, CureVac BV, is expected to list shares on the Nasdaq Stock Market in an IPO later this month and hopes to raise more than $200 million.

The company, which is in the early stages of developing a coronavirus vaccine, made news in March when the German government accused the Trump administration of trying to persuade CureVac to relocate to the U.S. CureVac closed a financing round that netted it $640 million last month.

“It’s crazy,” said Marshall Gordon, a senior health-care analyst at ClearBridge Investments and a longtime biotech investor, referring to what he regards as the hype around early-stage biotech companies.

“We tend not to invest in a lot of IPOs because many are at an early stage,” Mr. Gordon said. “We want to wait till there’s strong proof of concept in humans, and we’re not willing to chase such early-stage technologies.”

Even as vaccine research and trials are being fast-tracked, few drugs typically advance beyond early-stage testing. According to the Food and Drug Administration.

  • 70% of drugs move on from Phase 1. Phase 1 studies, which tests for safety and dosage, typically take several months, subsequent trials can take years.
  • 33% of drugs move on from Phase 2
  • Fewer are ultimately approved. While

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