A decline in venture capital (VC) funding has been offset by a flood of IPOs with growth coming from non-US biotechs, according to a Jefferies analyst.
For April and May 2019, biotech funding has declined 6.5% year-on-year to $9.3 billion (€8.3 billion) according to Jefferies analyst David Windley.
This, he said in a note, is due to a 46% drop in VC funding as the private market continues to be less kind to biotech over the past few periods.
“Both deal count (45 to last year’s 65) and average deal size ($22.6 million/deal vs. last year’s $29 million/deal) declined. While deal volumes fluctuate quite a bit month to month, the average deal size decline is one that has persisted through the first five months of this year. In that timeframe, deals have averaged $25 million, a 25% decline compared to a $33 million average in the same period last year.”
This decline has been somewhat offset through public funding, with a spate of initial public offerings (IPOs) in the period, especially outside the US.
“Non-US IPOs drove most of the growth ($301 million) in [May 2019] after being nearly nonexistent ($6 million) a year ago… On the other hand, US-based IPOs were roughly flat.”
Among the non-US IPOs in the month, Viva Biotech raised $194 million to launch onto the Hong Kong Stock Exchange, Aptabio Therapeutics raised $55 million in South Korea, and Ultimovacs raised $42 million in Norway.
And as June progresses, non-US IPOs continue to make the headlines, specifically with Hansoh Pharmaceutical Group. The private equity-backed drugmaker has raised around HK$7.64bn ($1bn) in Hong Kong and will use the proceeds for research and development, new production lines, automation, sales and promotion. Meanwhile, Irish firm Uniphar is hoping to raise up to €150 million ($167 million) from a placing of new shares.
US IPOs continue to register, for example: Genetic disease biotech BridgeBio Pharma setting terms for a $240 million IPO; Adaptive Biotechnologies is planning a $200 million listing; Immunotherapeutics developer Atreca hoping to raise $125 million; Gene therapy firm Prevail Therapeutics aiming to raise $125 million; Dermavant Sciences plans $100 million; Personalis to raise $100 million; and Akero Therapeutics $75 million.