Biotechs hold gold, silver and bronze in the 2018 IPO market.
Cancer immunotherapy devloper ARMO BioSciences (ARMO) is by far the year's best-performing IPO, up 200% from its offer price. Rounding out the podium is chronic itch biotech Menlo Therapeutics (MNLO; +105%) and gene therapy biotech Solid Biosciences (SLDB; +63%). Not surprising, these three also have the year's best first-day pops.
Biotechs have proved resilient to volatile market conditions, helped by insiders buying on the IPO and valuations that are rooted in lengthy clinical trials. One in four IPOs this year has been a biotech, and the seven average return of 55%. The industry's worst-performer, Sol-Gel Technologies (SLGL) is down just -6% from its IPO.
| Investors are buying into biotechs: Top 3 IPOs of 2018 | ||||
|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
First Day Return |
Return at 02/21 |
| ARMO BioSciences (ARMO) | $128M | $498M | +75% | +199% |
| Late-stage immunotherapy 2.0 biotech targeting advanced cancers. | ||||
| Menlo Therapeutics (MNLO) | $119M | $403M | +69% | +105% |
| Developing treatments for moderate to severe skin itch and chronic cough. | ||||
| Solid Biosciences (SLDB) | $125M | $574M | +41% | +63% |
| Developing a gene therapy to treat Duchenne muscular dystrophy (DMD). | ||||
That is, essentially, free gold.
Four biotechs have already prepped March IPOs
The annual February lull is coming to a close, and recent filings provide some visibility on March activity. Cybersecurity unicorn Zscaler (ZS) should get most of the attention. However, the biotechs are slated to keep coming. PolyPid (PLPD) is able to launch its $86 million IPO on Friday. BioXcel (BTAI) could follow suit on Monday, and two more - Arcus Biosciences (RCUS) and Taiwan Liposome Company (TLC) - can set terms the following week.
