Biotech initial public offerings (IPOs) surged in the first quarter (Q1) of 2024, with eight completed IPOs raising $3.72 billion—six times the amount raised in Q4 2023 and marking the highest quarterly biotech IPO value in over a year on a quarter-on-quarter (QoQ) comparison. This increase followed a two-year decline, indicating pent-up demand. Going forward, robust clinical data may encourage more biotech companies to go public later in the year, according to GlobalData, a leading data and analytics company.
According to GlobalData’s Pharmaceutical Intelligence Center, the surge in completed biotech IPO raising in Q1 2024 followed a two-year decline from $30.8 billion in 2020 to $5.9 billion in 2022 and $4.4 billion in 2023.
Ophelia Chan, Business Fundamentals Senior Analyst at GlobalData, comments: “High interest rates during 2022 and 2023 led investors to prioritize the existing portfolios over new opportunities, causing many biotechs to delay their IPOs until market conditions improved.”
The increase in IPO value raised in Q1 2024 set a strong pace for the year, possibly reflecting the pent-up demand after a two-year slump. The first and largest biotech IPO to date was CG Oncology, raising $437 million for its armed oncolytic virus therapy, CG-0070.
Chan adds: “Despite a decline in IPOs in Q2 2024, companies with strong clinical data that previously struggled to secure funding may now see early 2024 successes as an opportunity to pursue public offerings.”
In H1 2024, six completed IPOs each raised over $100 million, totaling nearly $5 billion. This is more than double the $2.2 billion raised by five high-value IPOs in H1 2023. This surge, along with more venture funding, has renewed investor optimism. In 2024, biotech companies in Switzerland, the US and India led with the highest IPO raises, with $2.5 billion, $1.5 billion, and $273 million, respectively.
The UK’s Financial Conduct Authority has recently updated the rules for listing companies on the London Stock Exchange. These changes are meant to make it easier for companies to go public and boost London’s position as a major financial hub post-Brexit. The new rules aim to improve Britain’s capital markets, attract more investment, and make London a strong competitor to financial hubs like New York and the EU.
Chan concludes: “The growth in completed IPOs in the first half of 2024 marks a positive shift following a period of downturn. This reflects renewed investor optimism to create new opportunities for companies with strong clinical data. The success of IPOs in the first quarter may prompt more biotechs to go public in the latter half of the year, although investors remain cautious as market conditions stabilize.”
