Partners Dan Winnike and Jeff Vetter are quoted in a Law360 article on their biannual IPO Survey, which found a a 62 percent year-over-year increase in initial public offerings by life sciences and technology companies.
A total of 78 life science and technology companies conducted an IPO in 2013, compared to just 49 in 2012, the Fenwick co-authors found, suggesting substantial investor confidence in those sectors.
The growing popularity of IPOs was likely due to investors’ increasing willingness to back new medical devices and products, Winnike told Law360.
“Life science companies are usually pretty capital-hungry in the early stages of development, before they bring their medical devices or products to market and start making any revenue,” he said. “When those businesses see that the market is receptive, they are more likely to start gearing up for an IPO.”
The number of IPOs for life sciences companies jumped from 14 in 2012 to 41 in 2013, the Fenwick survey found. In the second half of 2013, 61 percent of life sciences IPOs raised more than $75 million and 83 percent saw their shares trading above their designated price range.
Vetter said that the IPO market for life sciences and technology companies has been choppy in the early part of 2014, but he expects it to pick back up in the second half of the year.
"What everyone is wondering now is whether the bloom is off the rose," Vetter said. "Though that seems a bit short-sighted, especially coming off of such a strong close to 2013 when the speed with which IPOs were getting done and the number of new issuers coming back to market with follow-ons demonstrated an unusually robust appetite for new offerings. We'd like to see the same second-half trend in 2014."
The survey found that a record eight technology companies and three life sciences companies that completed IPOs in the second half of 2013 also completed a follow-on offering within six months.
The full article is available through the Law360 website (subscription required).