March 24, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Cambridge, Mass.-based startup Blueprint Medicines will take a run at the public market, filing an S-1 form with the U.S. Securities and Exchange Commission this week to float a $100 million IPO hot on the heels of its recent $265 million partnership with Cheshire, Conn.-based Alexion Pharmaceuticals Inc. , the company said Tuesday.
Blueprint has banked around $115 million in venture backing and $10 million in debt since its founding in 2011, and said if its IPO goes as planned, it would list on the NASDAQ under the ticker BPMC.
The company could not have picked a hotter time to go public—even if it has raised eyebrows by not listing longtime backer Fidelity Biosciences on its IPO funders list, perhaps because the company’s stake is too small.
Nevertheless, it joins a long list of successful, and lucrative, recent biotech IPOs. Longtime biotech exec and industry guru Stelios Papadopoulos released data at the beginning of 2015 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.
Indeed, the continuing parade of initial public offerings from biotech firms are a sign that investors are getting better at tolerating risk and finding new growth opportunities, venture capitalist Deepa Pakianathan, general partner Delphi Ventures, told BioSpace earlier this year.
Data released by based by Thomson Reuters in the MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) found that $33 billion was invested through the first three quarters of 2014 alone. Those numbers meant that total venture investing in 2014 has eclipsed total venture investing in all of 2013, which saw only $30 billion from VCs in four quarters.
Those numbers are good signs that IPOs for companies like Juno Therapeutics , Viking Therapeutics, Foamix Pharmaceuticals, Ltd. , ProQR Therapeutics B.V. and Tokai Pharmaceuticals are benefitting from the most vibrant investor climate in decades.
“We haven’t seen an IPO window like this since the late nineties and early 2000s, which means companies are getting funded and venture capital firms can raise funds,” said Pakianathan. “It’s all part of the process of attracting money to the sector. The IPO market is largely being driven by public market investors interest in new growth opportunities and a higher risk tolerance.
Despite the rash of IPOs, some VCs are remaining cautious going as deeply into the sector as they did the quarter prior. Deals in biotech fell 6 percent in when compared to when compared to the previous quarter. Overall, the biotechnology industry captured the third largest total during the quarter with $1.1 billion going into 110 deals, down 43 percent in dollars invested and 10 percent in deals from the prior quarter.
Much of that movement can be put down to a flight from risk after choppy summer in the capital markets. But there is still plenty of room for innovation and incentive for new startups to aim for solid exits or IPOs in coming months, said Pakianathan.
“By definition, earlier stage companies are riskier investments. There were a lot of generalist funds that participated in IPO’s, in addition to the specialist funds,” said Pakianathan. “The good news for venture funds is that as companies grow and go public, they can return capital to their investors and they can continue to invest in newer startups. All of this positive activity in biotech keeps the innovation cycle going.”
BioSpace Temperature Poll
U.K.-based GlaxoSmithKline filed a WARN letter in late February with the state of Pennsylvania indicating another 150 people would be laid off in its commercial and research and development group near Philadelphia. BioSpace wants to know if you think Pharm Country will do what it takes to keep biotech jobs in the area?
