Amid a world that has been brought to its knees by the COVID-19 pandemic, the biopharma industry has learned how to quickly adapt under these extreme circumstances. Not only has it rapidly brought to bear huge research efforts to uncover potential therapeutics and vaccines to counter the circulating coronavirus, but also it has learned how to conduct its business activities in a completely different way. For example, the pandemic hasn't stopped biopharmas from going public, with 15 companies graduating to the public arena in June alone. These financings have contributed to the $62 billion that has been generated in combined global public and private company financings in the first half of the year, just $6 billion shy of the current full-year record for financings established in 2015.

New normal here to stay

Investment bankers and money managers have been commenting that the increased efficiencies gained by companies conducting their IPO road shows virtually is contributing to the higher volumes of new listings. Speaking on a recent panel, titled “What it Takes: A Successful IPO in the New Virtual World,” at the European Biotech Investor Day 2020 hosted by Goodwin, Solebury Trout, Deutsche Bank and Nasdaq, Elise Wang, principal at capital firm Deerfield Management, noted that the ability to meet with companies virtually has contributed to roadshow timeframes being compressed, and in her view the process has become much more efficient with meetings being conducted via Zoom, rather than face-to-face.

That sentiment was echoed by fellow panelist Jordan Saxe, head of health care listings at Nasdaq, who said there is a renewed enthusiasm in the sector as virtual IPOs are encouraging young companies to go public. With the timeframes for obtaining a Nasdaq listing decreasing, he speculated that in this environment we could see a further 250 companies go public over the next two years.

According to BioWorld, a total of 15 companies went public in June, with all but one debuting on U.S. markets. The IPOs raised nearly $5 billion for the industry. Included in that total is buyer of biopharmaceutical royalties and an industry funder Royalty Pharma Inc.’s $2.175 billion IPO. Without it, IPOs still raised $2.8 billion, which is a 21-year record for a single month. In terms of volume, the 15 IPOs tie with June 2018 and July 2000. The highest number of IPOs for any one month was 17 completed in August 2000. The largest IPO for the month, aside from Royalty Pharma, was Legend Biotech Corp.’s $423.8 million raise to fund its Janssen Biotech Inc.-partnered BCMA-targeting CAR T candidate, LCAR-B38M.

So far this year, of the 35 IPOs completed, 28 companies have listed on U.S markets and raised a total of $7.08 billion. Encouragingly, the average market performance of those companies, as of June 30, is 73%. Ten listing companies have seen their shares double in value since their first day listing. (See U.S. Biopharma IPOs completed in 2020)

Blank checks for biopharmas

In his keynote talk at the “A Successful IPO” panel, Ben Thorpe, head of Healthcare Banking Europe at Goldman Sachs, noted that companies also have another route to a potential public listing through a reverse merger with a blank check company. IPOs of those so-called special purpose acquisition companies (SPACs) is on the rise. Those shell companies are formed with the sole intention of acquiring or merging with a company using the proceeds from their IPOs.

About 38 SPACs have completed their IPOs in 2020, including several that have been created targeting an acquisition in the life sciences arena, specifically biotechnology. Those entities once formed have up to 24 months to conduct an acquisition. If no transaction is completed in that period, the SPAC closes and returns the money being held in trust to the investors.

The latest to list is Panacea Acquisition, a blank check company formed by hedge fund Ecor1 Capital, targeting the biotechnology industry, which priced its IPO and raised $125 million from an offering of 12.5 million units at $10 each. Each unit consists of one share of common stock and one-third of a warrant with whole warrants exercisable at $11.50. The company plans to list on the NYSE under the symbol PANA.U.

In April, Chardan Healthcare Acquisition 2 Corp. closed its IPO of 8.5 million units at $10 each. The units began trading on the NYSE under the ticker symbol CHAQ.U. Each unit consists of one share of common stock and one warrant to purchase one-half of one share of common stock at an exercise price of $11.50 per whole share. Once the securities comprising the units begin separate trading, the common stock and warrants are expected to be listed on the NYSE under the symbols "CHAQ" and "CHAQ.WS," respectively.

In March, Arya Sciences Acquisition Corp., a SPAC sponsored by Perceptive Advisors, reported it was combining with Immatics Biotechnologies GmbH, and that transaction is now coming close to completion, Arya announced. Trading of the shares of the combined company, called Immatics NV, will commence under the symbol IMTX. The Tuebingen, Germany-based company will have gross proceeds of up to $252 million at closing.

The company targets a range of cancers with T-cell receptors (TCRs) to attack cancer cells. Immatics’ high-throughput Xpresident platform combines mRNA sequencing and mass spectrometry to identify human leukocyte antigen-presented peptide antigens that are expressed on cancer cells but absent from healthy cells. It is designed to show peptides on real tumors and provide quantitative data on copy numbers between peptides from the same parent protein.

On the runway

Several health care-focused SPACs have filed to complete IPOs, including DFP Healthcare Acquisitions, of New York, a blank check company formed by Deerfield Management that plans to raise up to $200 million from an IPO of 20 million units at $10 each. Each unit consists of one share of common stock and one-fourth of one warrant exercisable at $11.50. The company plans to list on Nasdaq under the symbol DFPHU.

In its S-1 filing, Boston-based Therapeutics Acquisition Corp. explained the importance of SPACs to the sector: “An acquisition by a special purpose acquisition company with a management team that is well-known and respected by biotechnology company founders, their investors, and management teams, we believe, will become a preferred route for a high-quality private health care company to access the public markets.”

There is no doubt that SPACs do offer a less arduous and costly route to a public listing, and it is probable that more will be formed in the second half of the year.

Sharp rise in follow-on offerings

The number of IPOs completed this year compares to the 36 IPOs completed at this time last year. However, there was a comparable sharp rise in the number of follow-on offerings. BioWorld recorded a total of 169 transactions, a 41% increase over the 120 completed in the first half of 2019. (See Biopharma financings volume by type)


There were 42 follow-on offerings in June, a record for a single month, that brought $4.5 billion into biopharma companies. That contributed to the $21 billion raised in the second quarter, bringing the total to$27.5 billion for the first half of the year. (See Biopharma financings value by type)

The largest follow-on offering in June was one completed by Allogene Therapeutics Inc. for $550 million. The South San Francisco-based company develops allogeneic chimeric antigen receptor T-cell (AlloCAR T) therapies for cancer. The largest public/other financing for the month was a convertible senior notes offering raising $850 million for Jazz Pharmaceuticals plc.

Venture capital financings

The heightened investing activity in the second quarter was also experienced in venture capital financings, bringing the total raised to $11.6 billion from 245 VC transactions, compared to 206 transactions raising $8.5 billion last year. Among the completed deals, Sana Biotechnology Inc. established a new record with a $700 million VC round last month. The cell and gene engineering company’s transaction displaced Moderna Inc. out of top spot, which previously had the highest venture capital financing of a traditional biotech company to date.

Almost half (110) of the transactions that disclosed details of their financings were at the seed or series A stage. There were 61 series B funding rounds, and 31 transactions were series C or higher rounds.

By the numbers

Not surprisingly, companies located in Massachusetts and California captured the lion’s share of the public and private financings at $14.7 billion and $13.2 billion, respectively. Biopharmas located in the regions of New York and New Jersey generated $4.09 billion and $2.13 billion, respectively. (See Biopharma financings by state: 1H:2020)

BioWorld Analyst Karen Carey compiled the statistics and generated the graphics used in this article.

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