BioWorld. Link to homepage.

Clarivate
  • BioWorld
  • BioWorld MedTech
  • BioWorld Asia
  • BioWorld Science
  • Data Snapshots
    • BioWorld
    • BioWorld MedTech
  • Special reports
    • Aging
    • Biosimilars
    • Artificial intelligence
    • Coronavirus
    • IVDs on the rise
    • Radiopharmaceuticals
    • Science '22 in Review
    • Top Biopharma Trends of 2022
    • Top Med-tech Trends of 2022
    • Premium reports
      • BioWorld Financings Reports
      • Disease Incidence & Prevalence Summaries

BioWorld. Link to homepage.

  • sign in
  • Sign Out
  • My Account
Subscribe
BioWorld - Saturday, September 23, 2023
Home » Blogs » BioWorld Perspectives » The Small IPO: Not Dead Yet? Regulation A Debated

BioWorld Perspectives
BioWorld Perspectives RSS FeedRSS

BioWorld

The Small IPO: Not Dead Yet? Regulation A Debated

Nov. 21, 2011
By Trista Morrison
No Comments

The biotech industry has long known it’s getting harder and harder for a small company to go public.

As John Craighead, managing director of investor relations and business development for the Biotechnology Industry Organization, said during a recent conference, about two-thirds of the biotech initial public offerings (IPO) in 2000 were preclinical. Today however, even clinical-stage firms struggle to get public. With the exception of last week’s pricing by Clovis Oncology Inc., every biotech IPO this year has taken a haircut on price.

Small biotechs are not the only ones suffering. At an SEC forum on small company capital formation last week, John Coffee, Jr., of Columbia University Law School, presented data on how small IPOs have disappeared across all industries:

From 1991 to 1997, nearly 80 percent of U.S. IPOs were below the $50 million threshold. But, by 2000, their share had declined to 20 percent (or less) of all IPOs, and in 2009 and 2010, IPOs of under $50 million appear to have constituted only around 17 percent and 18 percent, respectively, of the number of all IPOs.

Why does that matter? According to Coffee:

Because some prominent high tech companies – Intel, Amgen, Oracle, Cisco, Starbucks and Yahoo – did IPOs of under $50 million, an understandable concern arises that the disappearance of small IPOs implies that the U.S. is today unable to provide equity finance to precisely the smaller companies that historically have fueled job creation.

Hence, as BioWorld Today reported last week, there’s been a flurry of congressional action aimed at opening up new fundraising avenues for small companies.

This week’s issue of BioWorld Insight takes a deep dive into H.R. 1070, the bill predicted to have the most immediate impact on biotech by raising the Regulation A exemption from $5 million to $50 million, essentially allowing private firms to raise money publicly and trade their shares over the counter without going through the pricey IPO process.

Coffee acknowledged that H.R. 1070 is “the best crafted of the pending bills,” but he (and others, as the BioWorld Insight article explores) question whether or not companies will use it, and whether or not there is sufficient buy-side demand to support broad use. The demand issue is also relevant to H.R. 2930, the crowdfunding bill – which BioWorld Insight will explore next week. Stay tuned!

You must login or register in order to post a comment.

Report Abusive Comment

Popular Stories

  • Today's news in brief

    BioWorld
    BioWorld briefs for Sept. 22, 2023.
  • Today's news in brief

    BioWorld MedTech
    BioWorld MedTech briefs for September 22, 2023.
  • Hands holding torn contract

    Quite a fix: Orthofix sacks three top execs

    BioWorld MedTech
    Orthofix Medical Inc. terminated its CEO, chief financial officer and chief legal officer in a move that plunged the stock from $18.63 at Monday’s close to $13.01...
  • Illustration of Alzheimer’s in the brain.

    Study identifies cause of death for Alzheimer’s neurons

    BioWorld
    By creating a new mouse model of Alzheimer’s disease that better recapitulated how the disease plays out in humans, investigators at KU Leuven have gained new...
  • New NLRP3 inflammasome inhibitors named in PTC Therapeutics patent

    BioWorld Science
    PTC Therapeutics Inc. has patented new NLRP3 inflammasome inhibitors reported to be useful...
BioFuture ad

BioWorld Premium

Enjoy extended coverage for the most complete market view with BioWorld, BioWorld MedTech, and BioWorld Asia in a single, easy to access subscription.

Subscribe
  • BioWorld
    • Today's news
    • Analysis and data insight
    • Clinical
    • Data Snapshots
    • Deals and M&A
    • Financings
    • Newco news
    • Opinion
    • Regulatory
    • Science
  • BioWorld MedTech
    • Today's news
    • Clinical
    • Data Snapshots
    • Deals and M&A
    • Financings
    • Newco news
    • Opinion
    • Regulatory
    • Science
  • BioWorld Asia
    • Today's news
    • Analysis and data insight
    • Australia
    • China
    • Clinical
    • Deals and M&A
    • Financings
    • Newco news
    • Regulatory
    • Science
  • BioWorld Science
    • Today's news
    • Biomarkers
    • Cancer
    • Conferences
    • Endocrine/Metabolic
    • Immune
    • Infection
    • Neurology/Psychiatric
    • Patents
  • More
    • About
    • Advertise with BioWorld
    • Archives
    • Article reprints and permissions
    • Contact us
    • Cookie policy
    • Copyright notice
    • Data methodology
    • Podcasts
    • Privacy policy
    • Share your news with BioWorld
    • Staff
    • Terms of use
Follow Us

Copyright ©2023. All Rights Reserved. Design, CMS, Hosting & Web Development :: ePublishing