One prediction from our 2018 Annual IPO Review is already coming true: Biotech IPOs are getting bigger.
Two biotech IPOs with proposed billion-dollar valuations are slated to price this week. The first, Alector (ALEC), plans to raise $176 million at a market cap of $1.4 billion, and begin trading on Thursday. Then Gossamer Bio (GOSS) aims to raise $230 million at a $1.0 billion market cap the next day. Both are early-stage, have been well-funded, and target multi-billion dollar markets (Alzheimer's/dementia and asthma, respectively).
In 2018, only five of the year's 58 biotechs (9%) went public at billion-plus valuations, three of which were in the fourth quarter. The table below shows that the year's billion-dollar biotechs performed worse than the rest in first-day trading (+6% vs. +12%), but as of Friday's close, had held up better since then.
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