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How frothy is this IPO window?

Nature Biotechnology volume 33, page 11 (2015)Cite this article

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From 2010 to 2012 (the post-Lehman period), companies have almost doubled their value on average, mostly from share price appreciation. Since that time, IPO activity has also increased substantially, but those firms that have gone public are clustered around the 1× mark because there hasn't been much time to see an increase in share price.

Although a repeat of the post-millennium downturn is possible, Joe Panetta, president and CEO of San Diego's Biocom, thinks this IPO window is different. He says, “Some of the guesswork has been taken out of biotechnology, and I think maybe that's contributed to the IPO market remaining resilient for a couple of years.” This time, companies' shares have not, on the whole, increased dramatically after their IPO and investors are still being selective, a sign that the biotech market isn't too overheated. “There are deals that don't get done,” adds Jason Forschler executive director in Healthcare Investment Banking at J.P. Morgan in San Francisco. Those whose share price increased beyond the offering price are usually sought-after companies with oversubscribed IPOs, which require investors wanting to buy additional shares to do so on the open market.

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  • 28 April 2015

    In the version of this article initially published, the bars in the left panel of the figure were not correctly aligned with the top axis. The error has been corrected in the HTML and PDF versions of the article.

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  1. San Diego, California

    Brian Orelli

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Orelli, B. How frothy is this IPO window?. Nat Biotechnol 33, 11 (2015). https://doi.org/10.1038/nbt0115-11

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