The biotech IPO market has been very hot in the past few years, but it has set various new records in 2021. According to data from IPO research company Renaissance Capital, a total of 399 companies set prices for IPOs in 2021, raising US$142.5 billion. These figures make this year the busiest number of transactions since 2000, and the most fund-raising year in history.
Renaissance stated in its 2021 that healthcare, including biotechnology, is the busiest industry, accounting for 36% of IPO activity annual audit. The biggest biotech IPO this year belongs to Seattle cell therapy developers Sana Biotechnology, able to expand the size of the IPO, raised US$588 million.
Although the total amount of Sana’s IPO is eye-catching, this amount is also worth noting because it is the largest IPO in history, for a company that has not yet entered the clinic. Not long ago, biotech companies usually waited until clinical data was available before turning to the open market. Even early dose data can reduce investment risk.
Sana still has no clinical data. What it has is cell and gene therapy technology and the leadership of two former Juno Therapeutics executives who led the company to be acquired by Celgene for $9 billion in 2018. Sana stated that it intends to submit multiple investigational new drug applications in 2022 and 2023. This means that investors must wait another year or more before the company can release data that may affect the company’s stock price.
Other cell therapy developers listed this year include Lyle Immunopharmaceuticals, Reindeer Biosciences Corporation, Indoctrinate creatures, Talaris therapy, and Achilles tendon therapyMost of the biotech companies in this group have at least conducted early clinical testing at the time of their IPO.
Recursion Pharmaceuticals conducted the second largest biotech IPO in 2021.This company is headquartered in Salt Lake City, Utah $436.4 million raised Continue clinical development of drug candidates discovered on its AI platform. Similar to Recursion, Exscientia has an artificial intelligence-based drug discovery platform that is used to develop drug candidates for partners and their internal pipelines.A company based in Oxford, UK Raised $304.7 million from the IPO. Absci uses its artificial intelligence platform to produce proteins and becomes a drug candidate for its pharmaceutical industry partners, Initial listing raised 200 million US dollars.
According to Renaissance, the number of IPO applications has increased for the third consecutive year; the 495 IPOs submitted between 2021 and December 20 have increased by more than 94% compared to the same period last year. The US$142.5 billion raised was an increase of 82.2% from last year’s total.
Another feature of the year was the surge in companies that went public through mergers with special purpose acquisition companies (SPACs). The Renaissance company counts nearly 200 companies that have conducted such transactions. Biotechnology companies listed on SPAC trading in 2021 include Nautilus Creature, humus, Ginkgo Biological Engineering, and Pardes Biosciences.
As we enter the new year, the hot IPO market seems to be cooling. Although the market will not be completely cold this winter, Renaissance believes that investors should not expect a repeat of the IPO activity in 2021.
The company said: “Looking forward, we believe that the IPO market in 2022 will start slowly and cannot keep up with the record pace of the past year, but once the situation improves, a large number of IPO candidates are ready to make the leap.”
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