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Confidential IPO Filings Favored by Tech and Life Sciences Companies

April 25, 2014

Rob Freedman, co-chair of Fenwick’s securities practice, was quoted by The Wall Street Journal on the firm’s IPO Survey finding that most technology and life sciences going public in 2013 used the confidential filing option created under the 2012 JOBS Act.

All 43 companies that met the Act’s revenue limits and completed their initial public offerings in the second half of 2013 filed confidentially with the Securities and Exchange Commission, following the example of 22 companies that did so in the first half of the year.

Freedman told The Wall Street Journal that Fenwick generally advises clients to use the confidential alternative,

"We don’t really see the downside,” he said, noting that the SEC has been reviewing clients’ confidential filings with the same speed as public filings.

Fenwick's survey, which is the first to measure how quickly companies moved through the pipeline, found that life sciences companies were able to move through the filing process faster on average than tech companies in 2013. 

Freedman attributed the gap to the fact that many life sciences companies have little or no revenue to report on their financial statements, which gives the SEC fewer questions to ask about their accounting methods.

The full article is available through The Wall Street Journal website.