Before launching an IPO, biotech firms should consider timing, interest in their product, the macro environment—and the headaches of going public, according to yesterday’s BIO Investor Forum panel.
IPOs can finance the ultimate goal: bringing a new drug to market, said panelists in the session entitled, “Market Outlook: Is the IPO Window Opening Wider and What to Watch?” on Day 2.
The macro-environment: Following a couple of bad years for investment in small biotechs, panelists are “cautiously optimistic” about investor interest and the possibility of a successful IPO.
When should you go public? Having clinical data to prove the value of your product is essential to getting good value for your IPO. “If you don’t have data that’s coming in the next 6-12 months, it’s really a punishing market,” said Elaine Cheung, Chief Business Officer at Moonwalk Biosciences.
What’s popular? Drugs targeting obesity, oncology, autoimmune conditions, and neurology. But “chasing the same stuff as everyone else is very challenging,” warned Colin Walsh, Managing Director, Growth Equity at Goldman Sachs.
IPO vs. M&A: While both activities provide funds, M&A is the payoff investors hope for when they participate in an IPO, said Carolyn Ng, Partner and Managing Director at TPG Life Sciences Innovations. Walsh agreed: “It’s M&A. Every public investor is playing for M&A.”
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