Hope Springs Eternal in Biopharma IPO Pricing but Bad Haircuts Continue
This article was originally published in Start Up
While START-UP first noted an industry-wide tendency to overestimate the prices IPO investors were willing to pay in early 2005, IPOs have regularly fallen short of the anticipated price ever since, with few exceptions.
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In this issue, we present another installment of our quarterly review of pharmaceutical/biotechnology dealmaking-for April-June 2007. Our data come from Windhover's Strategic Transactions Database. Look for our quarterly review on the medical device, in vitro diagnostics, and research industries in upcoming issues.
Acquisitions and crossover investors are just beginning to push up IPO prices for the best biotech offerings, providing the first hints of real competition for shares of new issues.
The haircuts suffered by 2005's biotech IPOs are further proof that while the appetite for biotech offerings exists, public investors are demanding a better likelihood of post-market upside.