Compared to the IPO bonanzas of recent years, 2023 has felt like a chilly desert in the biotech world. In 2022, a whopping 47 IPOs raised approximately $4 billion, while 2021 saw a staggering 152 offerings that brought in over $25 billion, as reported by Reuters. Fast forward to this year, and only 23 IPOs have been filed thus far, according to DealForma, the online platform tracking biopharma deals. Of these, a mere dozen have successfully crossed the finish line, collectively raising $1.6 billion (excluding Johnson & Johnson’s record-breaking $41 billion IPO by Kenvue in May).
“Two years ago, it felt like everything was going public, even ventures that maybe shouldn’t have,” remarked David Diamond, a managing director overseeing life sciences and technology companies at the business consulting firm CBIZ MHM. “But this year, it’s been rather quiet.”
These cycles of boom and bust are not new, with previous disruptions occurring in 1987, 2000, and 2007. They often involve a market euphoria, where funders and businesses alike throw money at projects that ultimately fizzle out. During the height of the COVID-19 pandemic, the market surged with renewed interest in biomedicine, taking companies public based on preclinical findings, only to face economic turbulence last year. Now, aggressive interest rate hikes by the Federal Reserve have left investors cautious, leading to a 30% drop in venture capital and a 40% dip in early-stage biopharma funding compared to 2022.
In this cooling phase, Diamond predicts a shift towards investors focusing on companies that can substantiate their products with results from Phase II or even Phase III clinical trials. The few IPOs of the year so far align with this trend—Acelyrin, for instance, secured a whopping $540 million in its May IPO while in Phase IIb/III trials. Similarly, Sagimet Biosciences revealed interim Phase IIb data for its lead candidate denifanstat in nonalcoholic steatohepatitis (NASH) concurrently with its June IPO announcement.
Although the year has been sluggish, signs suggest the biotech space is warming up once again. Roughly half of the companies with active IPOs filed in July and August, with experts pointing to a potential surge in activity between Labor Day and Thanksgiving, with up to 10 companies eyeing IPOs, as reported by Endpoint News. Following that, a lull is expected until next year’s JP Morgan Healthcare Conference from January 8 to 11 in San Francisco, known for companies making IPO announcements. Chris Dokomajilar, founder and CEO of DealForma, shared the sentiment, saying, “There’s hope that things are going to turn, and the rush is really on for 2024.”
Let’s now delve into five companies that have thrown their hats into the IPO ring this year.
RayzeBio Inc.
California-based RayzeBio is making waves with a $311 million IPO, marking a pivotal moment in the world of targeted radiopharmaceuticals. The company’s momentum soared when it announced its IPO pricing on September 14th.
In a remarkable feat, RayzeBio dosed its first patient in a Phase III trial for its leading therapeutic candidate, RYZ101, back in May 2023. This groundbreaking drug is designed to combat gastroenteropancreatic neuroendocrine tumors. But that’s not all—RYZ101 is also undergoing Phase I testing for small cell lung cancer, adding to its promise as a game-changer in cancer treatment.
What sets RYZ101 apart is its use of Actinium-225, an exceptionally rare cancer-fighting radioisotope. To put it into perspective, the global annual production of this precious substance is less than a grain of sand. RayzeBio’s ambitious goal is to be the first to gain approval for a radiopharmaceutical therapy harnessing the power of Actinium-225.
With such groundbreaking potential, RayzeBio’s IPO isn’t just a financial milestone—it’s a leap toward redefining cancer treatment.
Neumora Therapeutics
Neumora Therapeutics, a trailblazing Massachusetts-based drug development company dedicated to tackling the complexities of psychiatric disorders, is making bold strides. Just shy of two years since its inception, the company made a resounding announcement with the pricing of its IPO on September 14th.
At the heart of Neumora’s mission lies its leading drug candidate, navacaprant, which has been turning heads. In a groundbreaking Phase II study, navacaprant demonstrated its potential to alleviate symptoms of depression and anhedonia in individuals grappling with moderate-to-severe major depressive disorder. The excitement surrounding this breakthrough has propelled navacaprant into Phase III trials, with results expected in late 2024.
Neumora Therapeutics is poised to rewrite the narrative for psychiatric disorder treatment, and it’s not stopping there. The company has its sights set on submitting a New Drug Application in 2025, offering a glimmer of hope for those battling these challenging conditions. With a $250 million IPO war chest, Neumora is poised to redefine the future of mental health treatment.
Adlai Nortye
In a journey that began confidentially in December 2022 but captured the public’s attention on July 31 this year, Adlai Nortye is set to embark on a transformative $72 million IPO. This company, with its roots in the Cayman Islands and operations spanning the U.S. and China, is carving a path towards innovative treatments for cancer and metabolic diseases.
At the forefront of Adlai Nortye’s arsenal is AN2025, a candidate that has entered Phase III clinical trials, offering newfound hope for those battling head and neck squamous cell carcinoma. With eyes firmly on the prize, the company aims to submit an FDA market approval application by the close of 2024.
But that’s not all—Adlai Nortye’s IPO comes with a twist. Japanese chemical juggernaut Nippon Kayaku has pledged to invest $40 million in shares alongside the offering, underscoring the confidence in Adlai Nortye’s mission. Moreover, an undisclosed potential investor is exploring the possibility of acquiring up to $50 million in shares, further fueling the excitement surrounding this innovative biopharma venture.
Jyong Biotech
Hailing from the Cayman Islands and extending its reach across Taiwan, Singapore, Hong Kong, and China, Jyong Biotech is making waves with its foray into the U.S. IPO arena. This late-stage startup is on a mission to revolutionize the field of urinary system disease treatments, leveraging the power of plant-based solutions.
Jyong Biotech’s star player, MCS-2, has endured a rigorous journey through four Phase III trials, emerging as a potential game-changer for benign prostatic hyperplasia. With the market for such treatment projected to surge beyond $11.9 billion by 2031, the stakes are higher than ever.
However, not all is smooth sailing, as Jyong Biotech confronts a unique challenge. The company is collaborating with an external statistical team to recalibrate specific data, aligning it with the stringent statistical analysis standards of the FDA. This crucial step is pivotal as the company prepares to seek regulatory approval.
Jyong Biotech’s IPO isn’t just about raising capital; it signifies a commitment to innovation that transcends borders. It’s a testament to the potential of plant-based therapies in tackling pressing healthcare needs.
Metagenomi
In a shroud of mystery, California-based Metagenomi is making waves in the biotech world. While no official announcement has been unveiled, whispers suggest that the company, dedicated to harnessing the potential of gene-editing technology, is collaborating with investment giant JP Morgan to potentially stage a captivating fall IPO debut.
Metagenomi’s journey thus far has been nothing short of remarkable, having already secured over $400 million in venture capital funding and striking groundbreaking partnerships with biopharma heavyweights like Moderna and Ionis. But what sets Metagenomi apart is its audacious vision—a commitment to treating diseases by rewriting the genetic code.
Unlike its counterparts on this list, Metagenomi’s platforms are still in the preclinical phase, shrouded in the anticipation of what’s to come. As we await further revelations, one thing is certain: Metagenomi’s IPO, when it emerges from the shadows, has the potential to redefine the future of gene editing and healthcare as we know it.