2014’s Biotech IPO Class: Strong Starts

Fifteen biotechs from the IPO class of 2014 have more than doubled their values since their debuts. Those stand-outs drove the impressive overall performance of the 67 newly public biotechs in the cohort: overall, the average IPO in 2014 was up 52.2% as of February 27.

As of February 27, there were 15 biotechs from the initial public offering class of 2014 that had more than doubled their values since their debuts. Those stand-outs, led by massive gains by rare disease drug developer Auspex Pharmaceuticals Inc. (up 460% since its February 2014 IPO) [See Deal] and by women’s health-focused Radius Health Inc. [See Deal] (up 433% since its June 2014 IPO), drove the impressive overall performance of the 67 newly public biotechs in the cohort. Overall the average IPO in 2014 was up 52.2% as of February 27 (17.6% median). (Since the beginning of 2014, the Nasdaq Biotechnology Index is up about 40%.)

The characteristics and strategies pursued by the 15 companies that had risen 100% or more sit at various points on the innovation spectrum. There are biosimilars companies (Pfenex Inc., up 145% since its July 2014 IPO [See Deal]; Coherus BioSciences Inc., up 134% since its November 2014 IPO) [See Deal] and gene therapy companies (Avalanche Biotechnologies Inc. and Eiger BioPharmaceuticals Inc., up 113% since July 2014 and 127% since January 2014, respectively). [See Deal] [See Deal] And (of course) there were oncology companies: CAR-T specialist Kite Pharma Inc. was up 285% since its June 2014 debut [See Deal] (Kite competitor Juno Therapeutics Inc., up “only” 96% since its December 2014 IPO, wasn’t even on the exclusive list [See Deal].) (See Exhibit 1.)

Not all of the big gainers shot up straight out of the gate. A few, including Coherus and Pfenex, were among the roughly one-third of the year’s IPOs that traded down during their initial market sessions. Among companies that IPO’d in 2014 and whose share prices fell on their first day of trading (22 companies, average drop 9.6%; median 8.4% drop), the average share price was actually up as of February 27 (the average price change from IPO date to February 27 was a 20.8% increase; median 9.4% increase).

Some, like Kite (up more than 70% on its first day) or the ultra-orphan disease company Ultragenyx Pharmaceutical Inc. (up more than 100% on day one) just never looked back. [See Deal] Among companies that IPO’d in 2014 and whose share prices rose significantly (25% or more) on their first day of trading (15 companies, average 63.6% jump; median 57.7% jump), the average share price was up big at February 27 (a massive average 103.8% return).

Exhibit 1

2014 IPOs: Top of the Class

Company	IPO Date	Therapeutic Focus	Share Price Increase IPO To February 27 Close
Auspex Pharmaceuticals Inc.	February 2014	Rare Diseases	460%
Radius Health Inc.	June 2014	Women’s Health	433%
Kite Pharma Inc.	June 2014	Oncology (CAR-T)	285%
Ocular Therapeutix Inc.	July 2014	Ophthalmology	175%
ZS Pharma Inc.	June 2014	Hyperkalemia	175%
Alder Biopharmaceuticals Inc.	May 2014	Antibodies (platform)	169%
Ultragenyx Pharmaceutical Inc.	January 2014	Rare Diseases	158%
Pfenex Inc.	July 2014	Biosimilars	145%
Zafgen Inc.	June 2014	Metabolic Diseases	142%
SAGE Therapeutics Inc.	July 2014	CNS Therapies	141%
Coherus BioSciences Inc.	November 2014	Biosimilars	134%
Otonomy Inc.	August 2014	Hearing Disorders	132%
Celladon Corp.	January 2014	Gene Therapy	127%
Avalanche Biotechnologies Inc.	July 2014	Gene Therapy	113%
Amphastar Pharmaceuticals Inc.	June 2014	Specialty Generics	100%

Strategic Transactions; Yahoo Finance