HONG KONG – Asia led the global market for initial public offerings (IPO) last year as the number of new offerings around the world powered upwards and the pharmaceutical and biotechnology companies took up a leading role.

The number of health care IPOs rose to 92 last year from 56 in 2012 and raised a combined $10.9 billion.

All told, there were 864 IPOs around the world that raised $163 billion in 2013, a 3 percent jump in the total number of new offerings but 27 percent growth in total proceeds compared to 2012, according to Ernst & Young, which expects global IPO volume in the first quarter of 2014 hit 250 to 300 listings that raised as much as $45 billion.

Almost half of all IPOs, 424, came from Asia Pacific while 216 hailed from North America, 197 from Europe, Middle East and Africa and 27 from Central and South America.

"2014 could be a bumper year for Asian exchanges due to the reopening of Mainland China's exchanges in Q1 2014 and stronger levels of activity from Hong Kong, Japan and Southeast Asian markets," noted E&Y in its 2013 Global IPO Update.

The surge of new IPOs in Asia in 2013 gave markets strong momentum going into 2014, helped by a lift of a ban on new offerings in China. (See BioWorld Asia, Jan. 8, 2014)

The path to market of a number of Asian biotech companies underscores the newfound confidence in the sector. Companies shared their experiences on April 8 during the 11th Annual BIO Asia International Conference in Tokyo, Japan.

Seattle-based eye disease specialist biopharmaceutical company Acucela Inc. (JP:4589) raised $162 million on Tokyo Stock Exchange motherboard in February. The company was founded in 2002.

Acucela started out as a fee-for-service company working with two major strategic partners in Japan, which allowed the company to access funds without time constraints. However, Acucela realized that this was not a path to rapid development so the company brought in venture capital investors, which work on three to seven year timeframes.

"I carefully chose investors that had a long-term view on the investment and we attracted in total $25 million from a Japanese VC that had the vision," said Ryo Kubota, president and CEO of Acucela Inc. "That was good decision-making that allowed us to continue operating many years before reaching the equity point."

Then Acucela started talking to multinational pharmaceutical companies including current partner Otsuka Pharmaceutical Co. Ltd., of Tokyo, which was able to fully fund clinical trials and let Acucela profit from the license it offered. Based on the actual services provided and licensing of patents in Asia, Acucela became cash flow positive in 2008.

"The blockbuster potential of our pipeline and also the competitive landscape, the healthy competition, have created a very fair deal with Otsuka," said Kubota.

But the true sign of the confidence of the market was the February offering, even though Acucela was trading this week at ¥1,572 ($15.37), down from a high of ¥2,380 ($23.28) in February and below its IPO price.

Another Asian biotech company that has made the way to an equity listing is Taipei-based Taigen Biotechnology Co.

Founded in 2001, Taigen (TT:4157) has raised $35.7 million from its IPO on Taiwan's Gre Tai Securities Market in January. Taigen announced last month that it had received a New Drug Application approval from the Taiwan Food and Drug Administration for its drug Taigexyn (nemonoxacin), an oral treatment for community-acquired bacterial pneumonia.

"Right now 70 percent of Taigen's shareholders are long-term holders," said Ming-Chu Hsu, chairwoman and CEO of Taigen. "The strategy of developing a biotech company in Taiwan is to fully utilize the regional advantages and give it to the China market."

Taigen was trading on April 8 at NT$54.50 ($1.81).

Another Taiwanese biopharmaceutical company, Taiwan Liposome Co. Ltd. (TLC), of Taipei, raised $25.1 million in its IPO in December 2012 and followed that up with another $100 million in September 2013.

"Last year alone the Taiwan market raised more than $1 billion for 20-plus biotech companies," said George Yeh, president of TLC (TT:4152). TLC was trading on April 8 at NT$266.50 (US$8.85), down from highs in February of NT$441 (US$14.65).

But the weakness in the stock, which has been a problem across many Asian markets, does not necessarily reflect the performance of the company, or of many of their peers.

"We still have $110 million in cash right now before we get to the real profit in the next two years or so in terms of generating sales for our partner," said Yeh, who is quite confident not only of the prospects for survival for the biotech sector in Taiwan but for its competitive success.

Yeh said about 30 percent of TLC's investors are foreign institutional investors and about 40 percent are retail investors.

"We print out an agenda for the milestones and target we want to reach and review them," said Yeh. "You do want to give the investors some kind of training course for them to understand, but now we see more changes, people are becoming more educated and analytic."

Not only is Asia-Pacific leading in terms of the total number of IPOs, but also accounted for 33 percent of total proceeds. The Hong Kong Stock Exchange remained the top Asian market raising $16.5 billion via 68 IPOs. Japan is also a key market which accounted for 60 deals last year worth $10 billion.