IPO Update: New Filings Feed Investor Fervor As Biopharma Stocks Rise
IPO launches in the US hit a wall in August, but several biopharma firms recently entered the queue, adding new opportunities for investors to chase the industry's outperforming returns.
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Only two drug developers launched offerings in April and the average 2018 IPO return was just 9% – half the first quarter average – at the end of last month. Unity's May 1 offering was the 17th biopharma IPO this year.
Seven biopharma IPOs launched in the US in January with an average return of 52.8%. The most recent was Sol-Gel's on Jan. 31, but the largest was a $128m offering by ARMO. Solid had the most controversial IPO, but it still gave investors a 70.7% return, contributing to the question: Is biotech in a bubble?
With an average return of 33.2% in 2017, the number of biopharma IPOs that launched last year rose to 42 after falling to 30 in 2016 compared with 62 in 2015. Following a rough fourth quarter for biopharma stocks, will the IPO momentum continue in 2018?