Stern IR News and Events


April 23, 2021

Let us congratulate Stern IR Client Impel NeuroPharma on pricing its $80M IPO this week! GO $IMPL!

1Q Robust Financing Roundup

John Carroll published an article in Endpoints earlier this week which recapped the tremendous financing markets in 1Q 2021. According to data from Chris Dokomajilar at DealForma, and looking across all healthcare/life sciences, 1Q 21 raises included:

  • $17.8B in venture funding across 294 rounds;
  • $9.7B in 39 IPOs; and
  • $6.3B in 24 SPAC IPOs

Other highlights:

  • Oncology continues to be the most popular field for new investments, garnering about $4.7B in seed or Series A money across 2020-2021 YTD. Neuro follows at a distant second, with about $1.2B raised over the same period
  • Earlier stage companies continue to garner significant interest, both for private and public financings:
    • Earliest stage platform companies raised $2.1B in 37 rounds in 1Q 2021, which is already close to half of full-year 2020 numbers;
    • 40% of 1Q 2021 IPOs were for discovery/preclinical-stage companies; this number increases to 70% when including Phase 1 companies. Only 30% of IPOs were Phase 1 or earlier when the current IPO window opened in 2017
  • 1Q 2021 saw 299 R&D partnerships signed, with $3.2B upfront and $27B in total deal value – 60% of partnerships were with preclinical/platform-stage companies
  • On the M&A side, 1Q 2021 saw 114 acquisitions, just under last quarter’s 130, though the total M&A cash at play was significantly lower, coming in at $35.6B in 1Q vs. $77.4B in 4Q 20

The Rapidly Expanding Biotech Sector

As part of its April monthly wrap up, BMO quantified a phenomenon we’ve all long recognized: the pace of biopharma new company creation over the last several years has been absolutely astounding. In fact, from 2016-March 31, 2021, BMO reports that the publicly traded biotech sector increased by a net 183 new companies – 266 IPOs, netted out against 83 acquisitions and 9 delistings. Meanwhile, the aggregate market value of the sector increased by over $900 billion over the same period.

More specifically, from January 1, 2016-March 31, 2021:

  • The number of publicly traded biopharma companies increased by 42%, from 440 to 623.
  • The aggregate market valuation of publicly traded companies increased by 31%, from $2.9T to $3.8T.
  • The median market value of publicly traded biopharma companies increased by nearly 87%, from $312M to $585M.
  • 266 companies went public on Nasdaq and NYSE, ranging from 26 IPOs in 2016 to 74 in 2020. In 1Q 21, 25 companies went public, putting 2021 on pace to surpass 2020 totals.
  • 9 companies went public via SPAC mergers. However, this number is likely to increase significantly in 2021 and beyond, as there were 28 life sciences SPACS seeking acquisitions as of 3/31/2021.
  • 83 public companies were acquired, representing about 31% of the 266 IPOs. That said, the acquisitions subtracted far more than the IPOs added in market value: the aggregate value of the 83 acquired biopharma companies was about $423B, compared to the $191B in value added by the 266 IPOs.

We’d suggest that this data speaks to the importance of strategic investor relations efforts that prioritize newsflow-driven interactions, as well as a regular cadence of Wall Street engagement in order to remain top of mind in the midst of so much competition for mindshare.

Biotech: Now the Most Shorted Stocks

In recent weeks, investors have increased their short bets against biotech companies, based on the expectation that the sector is particularly vulnerable to the Biden administration’s increased scrutiny on everything from M&A to prescription drug prices. According to an article published by S&P Global Market Intelligence, five of the ten most-shorted stocks across all U.S. exchanges at the end of March were biotech stocks (Esperion, Clovis, Inovio, Kadmon and CEL-SCI Corp), and the healthcare sector more broadly accounted for 12 of the top 20 most-shorted stocks.

Looking across the sector, average short interest in healthcare stocks hit 5.17% at the end of March, up 31 basis points from mid-March and 53 basis points from mid-February. By contrast, short selling of the S&P 500 averaged only 2.26% at the end of March.

New Funds Claim Differentiated Strategies: The Column Group Crossover (TCG X), Forbion and Versant

This week, we saw three new funds raised:

  • TGC Crossover (“TCG X”), in partnership with The Column Group, raised an inaugural $824M fund focused on crossover and public investments in the life sciences. The firm is led by Founding Manager Partner, Dr. Chen Yu, as well as Cariad Chester, Ryuk Byun and Giuliano Marostica, and will invest in innovative drug discovery companies that are seeking to make an impact on unmet medical needs.
  • Forbion announced the final close of its Growth Opportunities Fund I, at €360M ($428 million). The fund will invest in late-stage European life sciences companies, leveraging three distinct strategies that provide: providing private capital for clinical-stage development assets, cross-over capital to companies aiming to pursue a near-term public listing, and capital injections to support existing under-valued public companies. In all cases, Forbion Growth I will aim to take leading positions with an investment size of up to €35 million per deal.
  • Versant announced $950M in additional capital allocated across a platform of three separate vehicles, including Versant Venture Capital VII, a $560 million primary global biotech fund; Versant Voyageurs II, a $140 million booster fund; and Versant Vantage II, a $250 million later-stage opportunity fund.

Market Update:

The overall markets closed slightly down this week after some volatility, with the NASDAQ, DJI and S&P 500 down 2%, 1% and 1%, respectively. The VIX closed up 13%, sitting at 18.77 as of market close on 4/22. The biotech markets performed slightly better, with the NBI, BTK and XBI all closing up 1%.

Over the past couple of weeks, we saw the following deals price:

  • 1 SPAC merger: Tango ($353M)
  • 7 IPOs: Agiliti ($368M); Agilon ($1.2B); Akoya ($132M); Stern IR Client Impel ($80M); NeuroPace ($102M); Rain ($125M); Treace ($106M)
  • 3 follow-ons: Evolus ($86M); Seaspine ($88M); Synlogic ($30M)
  • Several private financings, including: Anavo (seed, $24M); Jaguar (Series B, $139M); Stern IR client Janux (Series B, $125M); Molecular Assemblies (Series A, $24M); Repertoire (Series B, $189M); Recursion (Series D, $239M); Seed Health (Series A, $40M); Virta Health (Series D, $65M)