CALBIO15: Investors Will "Set Higher Bar" for Biotech IPOs in 2015 As Market Corrects, Says Panel
March 2, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
There is a widening opportunity for biotech companies in 2015 but investors are going to have a much higher bar for companies looking to go public in the coming months, a panel at the CALBIO Conference said Monday in San Francisco.
Dubbed “The Biotech Crystal Ball: Will the IPO window be open or shut in ’15?” the panel included Brent Ahrens, general partner, Canaan Partners; Jennifer Jarrett, managing director for health care investment banking at Citigroup; Laurent Fischer, a medical doctor and chairman and CEO, Tobira Therapeutics Inc.; and Michael Fitzhugh, staff writer, BioWorld. It was moderated by Carin Canale-Theakston, president and founder of Canale Communications Inc.
The first-of-its-kind panel, had a biotech CEO, banker, fund manager and venture capitalist who were asked to predict where the financing market would be in March of 2015 at the time of the CALBIO conference. “The responses were sealed in a time capsule and were unlocked, shared and discussed for the first time during the panel discussion,” said organizers. “In addition to a captivating conversation, the expert who racked up the most on target predictions will be awarded the prestigious Crystal Ball Trophy and bragging rights for years to come.”
Throughout the discussion, it became clear that while last year’s bumper crop of biotech IPOs was extraordinary, it has left some investors wary of the good times continuing for much longer.
Citigroup's Jarret said she believe “the bar will be raised for what investors are looking for in biotech IPO market,” while Ahrens said there was no doubt there would be a “cooling of the biotech IPO market.”
Longtime biotech exec and industry guru Stelios Papadopoulos released data in January showing that 2014 had 22 percent more biotech IPOs than the infamous “bubble” year of 2000, a major metric market watchers will be eyeing as they head boisterously into a new boom year.
That data found that there were an “astonishing” 82 biotech IPOs in 2014, a massive increase from the 67 IPOs 2000. But deal size overall was smaller, with capital raised in 2014 clocking in at $5.5 billion, compared to $5.7 billion in 2000.
In his report were multiple charts showing the industry’s IPOs climb (see images).
Papadopoulos has been collecting annual biotech IPO data by hand since 1979—a means of data collection most analysts find to be more meticulous and accurate than larger “number crunching” firms like Reuters or Bloomberg that sometimes miss deals.
“I consider his data the definitive source of biotech IPO information,” wrote ISI Evercore analyst Mark Schoenebaum in a note to investors that parsed the data. “I have found many other sources, including Bloomberg, to be inaccurate.”
Papadopoulos is perhaps best known as the chairman of Biogen Idec and the former managing director of life sciences investment banking division at SG Cowen Securities Corp, from which he retired in August 2006.