It’s been quite a year for biotech IPOs. As of July 24th, there were already 38 biotech IPOs – more than in all of 2017. Of those, six were preclinical companies, a significant jump from the one preclinical biotech to go public last year. From a local perspective, 15 of those 38 biotech IPOs (40%) were from Massachusetts-based companies. The most recent Massachusetts biotech IPO set a new record raising $241 million – almost $100 million more than the last record which was set in May.
All this success leads to the obvious question: is the cyclical biotech IPO window simply open right now, or are we in an overheated IPO market or even a bubble? From my perspective, the answer is clear. We are not in a bubble because the money is following the science. There’s no doubt we’re in a bull market for biotech, especially for early stage companies, but the foundations of our industry and these new companies are too strong for me to believe we’re headed for a downturn.
While preclinical companies going public is a worrisome sign in a vacuum, I believe investor enthusiasm in such companies going public this year is well placed. These companies are building off of science that’s been in the works for decades – immunoncology, advanced platform technologies, gene and cell therapies, etc. – and new treatments stemming from those discoveries are finally a reality. We’re seeing a new wave of breakthrough therapies that treat the underlying cause of disease, not just the symptoms, and some that people are even calling cures. Cumulatively, it’s creating unbelievable opportunities to change the course of disease and improve the lives of patients.
Making sense of the current IPO market is no easy feat, but the underlying theme is that biotech is one of the strongest industries to invest in, and that is not going to change anytime soon. The money will continue to follow the science, and biotech startups will continue to grow throughout Massachusetts. This will certainly come with a new set of challenges – competition for office space and talent is already at an all-time-high – but I’m confident we’ll find a way through it with a strong focus on improving our industry’s diversity, a commitment to STEM training, and by looking outside of Cambridge for physical space. I look forward to seeing Massachusetts strengthen its position as the #1 life sciences cluster in the world, supported by our partners in academia and government.
– Bob Coughlin