The Top 5 Biopharma IPOs of 201611 January, 2017
2016 was not exactly the year of the IPO. There were fewer overall offerings in 2016 and the total value of the IPO market was far less than the previous year. However, the biopharmaceutical industry seemed to be immune to the rather stagnant IPO waters.
In fact, biopharmaceutical financings remained robust in 2016, ranking third for the most money raised in a single year for the last 20 years.
In 2016, the biopharmaceutical industry raised $37.3B compared with $37B in 2014. 2016 falls only slightly behind what many consider the industry’s blockbuster year of 2000, which raised $38B.
Note: The year 2015 brought in $68.6B, but that figure reflects huge senior notes offerings from Celgene Corp. ($8B), Gilead Sciences Inc. ($10B) and Biogen Inc. ($6B).
The two biggest IPOs occurred overseas on foreign markets and the largest IPOs conducted on US markets included two headquartered in foreign countries and one US-based company, all three debuting on the Nasdaq Exchange.
Here are the five biopharmaceutical IPOs that raised the most money in 2016:
Samsung Biologics - $2B
Samsung Biologics is the biopharmaceutical arm of tech giant SAMSUNG Group. Just as Samsung Electronics makes chips for Apple’s iPhones, BioLogics seeks to capitalize on Samsung’s manufacturing prowess to make drugs for big biotech companies. In their initial public offering last November the company raised almost $2B (US) giving the company a total value of $7.9B.
The Korean company intends to spend about half of its IPO proceeds on a third plant, making it the world’s largest biologics drug-making operation. Biologics already counts Bristol-Myers Squibb and Roche as customers for biologics, which are made from living cells, blood components, and tissue, rather than chemicals.
China Resources Pharmaceutical Group - $1.8B
The next big IPO money winner last year was another foreign company, China Resources Pharmaceutical Group Ltd. The company raised $1.8 billion in one of the biggest Hong Kong initial public offerings of the year.
The company, which is controlled by a Chinese state-owned conglomerate, priced its IPO at 9.10 Hong Kong dollars (US $1.17) per share. The pricing was toward the lower end of an indicative range of HK$8.45 to HK$10.15 per share.
A group of ten cornerstone investors—who buy big chunks of shares and hold them for at least six months after the listing—took nearly half of the offering even before the pricing was fixed.
China Resources Pharma plans to use around 45% of proceeds from the offering to make acquisitions in China and to expand its pharmaceutical manufacturing and distribution businesses. The remainder will be used to set up more logistics centers and warehouses, invest in research, upgrade its technology systems, and repay debt.
Myovant Sciences - $218M
The biggest biotech IPO of the year in the US, and perhaps the most famous due to the age of its founder, was done for Myovant Sciences when Vivek Ramaswamy, a 31-year-old pharmaceutical deal maker and drug developer, raised $218M for a company that he had formed only months earlier. The IPO values Myovant at around $878M.
Earlier in the year, Myovant obtained its only assets, a prostate cancer drug and a female infertility drug, both under development, from Takeda Pharmaceuticals. Ramaswamy did not pay any cash for the drugs, but instead Myovant issued Takeda 5.1 million shares, 12% of Myovant, and promised to pay a high single-digit royalty on Myovant’s net sales of both drugs.
The Myovant IPO caught the attention of Pfizer, which was reported to purchase as much as $30 million of Myovant shares in the IPO. Ramaswamy’s holding company, Roivant Sciences, owned about 64% of Myovant after the IPO.
Intellia Therapeutics - $108M
Demonstrating that Wall Street believes in the promise of gene modification to treat diseases, Intellia Therapeutics of Cambridge, Massachusetts went public last year raising a reported $108M.
Intellia owns the rights to an important piece of the CRISPR-Cas9 gene editing technology, a unique technology that enables geneticists and medical researchers to edit parts of the genome by removing, adding or altering sections of the DNA sequence. It is currently the simplest, most versatile and precise method of genetic manipulation, and is therefore causing a buzz in the life sciences world.
Intellia joins Editas Medicine, also of Cambridge, Cellectis of Paris, France, and Sangamo Biosciences of Richmond, CA, as publicly traded biotechs using gene editing to develop their primary products.
BeiGene - $158M
The prize for the first IPO of 2016 on a US market goes to BeiGene, a Chinese drug company developing immuno-oncology drugs for cancer treatments. Early in the year, BeiGene sold 6.6 million shares at an issue price of $24, to raise about $158M.
Immuno-oncology is a unique approach that uses the body’s own immune system to fight cancer, and although still in its nascent stages, has already garnered extreme optimism in the biopharma world.
BeiGene has offices and facilities around the world, including global clinical headquarters in Fort Lee, New Jersey with additional clinical facilities in Australia, New Zealand, and Beijing, China, an R&D center in Beijing, a manufacturing plant in Suzhou, and operations in Beijing, Shanghai, and Boston, Massachusetts.
While election-year rhetoric has certainly added to the volatility of biotech stocks, most experts agree that biotech's 5- to 10-year investment story remains promising providing investors can weather the ups and downs.
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