IPO prep and execution is a key part of our practice, and we've had the opportunity to facilitate nearly 20 offerings/filings in the past four years; three of which took place last quarter.
Danforth founders Gregg Beloff and Daniel Geffken each presented at IPO readiness workshops in the past month, and here we share five quick takeaways.
1) Life science IPOs have outperformed all other S&P sectors in 2017; up nearly 30% YTD and with 85% of offerings pricing at or above range. However, the fact that more than 50% of 2015 IPOs now trade at 25+% below their offering prices continues to weigh on appetite. Overall deal volume is down from the highs of 2014-2015, and there is more focus on maturity and quality with exuberance limited to select areas such as immuno-oncology.
2) Of the priced deals,
85% of biopharma companies had advanced lead products to at least phase 2 and 10% of companies had launched commercial product.
3) About two thirds of recent life science IPOs have been supported by crossover rounds, continuing a trend of the past several years. Prior crossover funding is associated with higher enterprise valuations and better after market performance.
4) SEC hot buttons include revenue recognition, segment allocation/reporting, stock compensation and presentation quality. Advanced planning for addressing questions in these areas will speed the SEC process and reduce potentially costly review delays.
5) Pre-marketing public market investors through non-deal roadshows will help support aftermarket stock price and reduce deal turnover.
How We Help
: A well orchestrated IPO is best achieved with careful preparation and planning as many as two years in advance. The Danforth team is well equipped to help from start to finish, including facilitation of audits for S-1 readiness, issuing PCAOB-compliant financial statements, drafting the S-1 and providing the right connections to the buy and sell side.
Photo: Daniel Geffken joins fellow Life Science IPO Summit presenters to ring the NYSE opening bell on September 29. Click the image to view video.