This is the third edition of our “MTS US Biotech IPO Monitor” where we will use our proprietary database* to generate and discuss thought-provoking statistics and observations. IPO Monitor is one of the pieces published by Strategic Advisory Analytics group at MTS. MTS’ “Strategic Advisory Analytics” reports exemplify our value add strategic advisory services to clients across all healthcare industry sub-sectors. A redacted version of the IPO Monitor can be accessed here. Corporates and institutional investors can request a full version by sending an email to any partner at MTS.

A strong H1:2018 on number and initial IPO valuations…

  • H1:18 was a strong first half in terms of the number of IPOs; 33 in H1:18, vs. 17 in H1:17, 16 in H1:16, 26 in H1:15, but lower than the banner 42 in H1:14
  • H1:18 average raise/post money valuation was stronger that full previous years at $106/$521m vs. FY17 $100m/$425m, FY16 $76m/$334m, FY14 $89m/$291m, but lower than the FY15 $109m/$529m

…with a scattered performance

  • 19 out of the 33 H1:18 IPOs have posted gains at an impressive average of +49%; The 14 underperformers have an average loss of -23%
  • Mean IPO to current performance for class of H1:18 +19% vs. class of 2017 +67%, class of 2016 +80%, and class of 2015 +20%

2018 Shaping to be the Best for this Industry – Gene Therapy and foreign issuers continue to be red hot

  • The number of potential IPO candidates in the pike continues to pressure the time capacity issue to vet companies from the buyside
  • The total post money valuation hit an all time high at $17.2Bn in H1:18 (partly bolstered by the Morphosys ADR listing)
  • The strong momentum in Gene Therapy companies continued in H1:18 with 8 IPO companies or 24% of all H1:18 IPO’s. Post Money valuations for these Gene Therapy companies at a high at $510m
  • Four foreign issuers accessed the US markets, which compares to 7 in FY 2017 and 2 in FY2016

5 Key Messages From Detailed Analysis of 2012-Q1:2018 IPOs

  • “Quality” Over Stage of Asset: Pre-Clinical/PI IPOs Have Higher Raises and Valuations than PIII Companies
  • Gene Therapy Companies Continue to Garner Higher Raises and Valuations than Small Molecule Companies
  • 85% of IPOs Are Still Trading As Original Entities; Exits: 9% M&A, 4% Reverse Merger, 2% Bankrupt or Delisted
  • Foreign Issuers Have Broad Access to US Capital Markets – Higher Quality Companies Eventfully Gravitate to US listings
  • ~30% Insider Participation Continues to be an Important Factor for a Successful IPO


*MTS IPO Database
The MTS bespoke IPO database includes the 805 US Biotech IPOs from the first 1979 US Biotech IPO with micro detailed analysis from 2012. Special thanks to Stelios “The Godfather” Papadopoulos for the historic data.

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