In our 2018 year-end review of life sciences and tech IPOs (co-authored by my colleagues James Evans and Rob Freedman), we noted that life sciences offerings totaled 67 raising an average of $133 million while there were 45 technology deals raising an average of more than $380 million, not including Spotify, whose unique direct listing process did not raise capital. We were curious to see if those trends would continue in 2019, so we took a look at the numbers year to date.
2019 Deal Size
Through the end of May 2019, there were 27 life sciences offerings that raised $2.3 billion. On average, life sciences IPOs grossed $86 million. The largest deal so far was Gossamer Bio’s initial public offering that garnered $276 million. The smallest offering was $5 million raised by Guardion Health Services.
On the technology side, there have been 11 IPOs through May raising an impressive $14 billion. However, that total includes the outsized offerings from Uber and Lyft which took in $8.1 billion and $2.34 billion respectively, lifting the average offering to $1.3 billion. Omitting the two rideshare companies, the value of the average tech offering drops to $416.7 million. After Uber and Lyft, the next largest tech offering was Pinterest at $1.4 billion.
Five of the technology IPOs were listed on NASDAQ while six listed on the New York Stock Exchange. However, every life sciences IPO listed on the NASDAQ. The fact that life sciences companies are selecting the NASDAQ has driven the NYSE to restructure its fee schedule to make it more attractive to pre-revenue companies, which to date includes most life sciences companies.
Among technology offerings, three of the 11 deals priced above range while the rest priced within range. The three that priced above range were Zoom, Pinterest and PagerDuty, a cloud computing company.
On the life sciences side, three companies, Kaleido Biosciences, Applied Therapeutics and IDEAYA Biosciences, priced below range. ShockWave Medical, a medical device company, was the only life sciences offering to price above range.
All but five of the life sciences companies that debuted since the first of the year were venture-backed. Of these five that weren’t, two companies were based outside of the United States: GENFIT S.A. (France) and Brainsway Ltd. (Israel). The other three that were not venture backed include Guardion Health Sciences, Hoth Therapeutics and Stealth BioTherapeutics.
Among technology offerings there were three companies without venture backing. One, Jiayin Group, is based in China. The other two, Parsons Corporation and SciPlay Corporation, are based in the U.S.
Five non-U.S. life sciences companies debuted so far this year:
Among the technology offerings there were three non-U.S. companies:
With several life sciences companies reportedly in the IPO pipeline, we expect the window for life sciences companies to remain open in the third quarter, although valuations will likely remain modest. While tech offerings won’t disappear, concerns over the aftermarket performance of former tech unicorns may slow the pace there.
Originally published June 18, 2019 on Fenwick's Life Sciences Legal Insights blog.