Biotech money: Global funding down despite spate of IPOs

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.

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“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.”

IPO Round-Up

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.

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