DUBLIN Publicly listed European biotechnology firms raised a record €6.26 billion (US$6.8 billion) in IPOs and follow-on offerings during 2015, according to a newly issued report from the Berlin-based consultancy and market analysts Biocom AG.
The total is 82 percent ahead of the €3.44 billion raised in 2014. It represents further evidence that the European sector at least the publicly listed part of it is now increasingly globalized in its ability to access capital. Nasdaq is looming larger than ever as a source of finance. Just 25 European Nasdaq-listed firms or 13 percent of the 191 that Biocom documented raised €2.01 billion or 32 percent of the total.
According to Biocom, four European firms raised €406.6 million in IPOs in 2015, down from €509.6 in 2014. The majority of the funding came through follow-on offerings. Nasdaq counts any fundraising by a company that is new to Nasdaq, including those that are already listed on their home exchanges, as an IPO. By that reckoning, 10 European firms raised just over $1.1 billion in Nasdaq IPOs in 2015, up from the $584.7 million raised by six firms in 2014. (See BioWorld Today, Jan. 5, 2015.)
The class of 2015 includes: Advanced Accelerator Applications SA (US$75 million), Oasima Pharmaceutical AB (US$9.5 million), Nabriva Therapeutics AG ($92.25 million), Celyad SA (US$100.1 million), Biotie Therapies Oyj (US$56 million), Galapagos NV (US$210 million), Adaptimmune plc (US$191.25 million), Cellectis SA (US$228 million), Summit Therapeutics plc (US$34.2 million) and Ascendis Pharma A/S (US$108 million).
(The 2015 total excludes Irish-Australian veterinary biotech firm Nexvet Biopharma plc, of Tullamore, Ireland, which took in another $40 million. It also excludes $65 million Galapagos raised on Euronext, as part of its $275 million global offering).
There is strong anecdotal evidence, too, that American cash now owns large equity stakes in leading European biotech companies, such as Denmark's Genmab A/S and Germany's Morphosys AG that remain listed on their local exchanges.
By Biocom's reckoning 21 of the 25 IPOs completed by European biotech firms in 2015 happened in Europe. Euronext remains Europe's leading biotech exchange firms listed there raised €2.096 billion, Biocom reported, including €386.2 million in IPOs and another €1.71 billion in follow-on offerings. Its junior exchange, Alternext, added another €97.1 million. In London, the split between the main market of the London Stock Exchange and the Alternative Investment Market (AIM) was more even. The former generated €418.6 million in follow-on offerings (with no IPOs), while the latter generated €473.8 million, comprising €48.2 million in IPOs and €425.6 million in follow-on transactions.
Europe's public biotech firms remain collectively immature according to Biocom some 75 percent have a market cap below €300 million, with 46 percent in the micro cap ($50 million $300 million) range and another 29 percent in nano-cap (less than $50 million) territory.
This level of performance offers a rejoinder to those who call for pan-Europe initiatives or incentives that would foster a healthier appetite for biotechnology on the part of European investors. Germany, in particular, remains bearish on biotechnology but artificial incentives for biotech have a poor track record in that country. Although the financing scene is highly fragmented, it is, arguably, now delivering the necessary finance. For how long more is the key question, particularly given the market jitters that accompanied this year's J.P. Morgan Healthcare Conference. Whether the share price falls represent a short-term blip due to profit-taking or the beginning of a long-term downward trend is not yet clear.
For European biotech, investing the capital it has raised in delivering therapeutic innovation to the market and to patients represents the best way of sustaining the flow of capital and, maybe, of opening up the wallets of some European investors.