Biotech Excerpt: Pharma, Biotech & Medtech 2020 in Review - February 2021
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Biotech Excerpt: Pharma, Biotech & Medtech 2020 in Review February 2021
A big year for biotech flotations
With the final numbers in, the excesses of 2020 are laid bare. An astonishing $12.7bn was
raised last year by young drug developers via IPOs, a figure that outstrips previous records
by a long way.
The number of companies that went public is also high, although not remarkably so. But those that did float
managed to amass huge sums, taking full advantage of the cash flowing readily into the sector.
Whether this largesse continues in 2021 is the burning question for IPO investors, and for now there are few signs of
diminishing appetites.
These analyses concern pure-play drug developers only.
Tracking demand for IPOs Source: Evaluate®. January 2021
10%
Average premium/
discount to float range 8
6
4 4
2
Average premium/discount to float range
0% 0 0
-1 -1
-2 -2 -2
-3
-5
-6
-8
-10% -10
-11
-18
-19
-20%
-30%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2017 2018 2019 2020
Year
The chart above illustrates how investor interest in biotech soared last year, with all listing companies managing to
float at or above the initial prices proposed by bankers. Many pulled off upsized offerings, selling substantially more
shares than planned at valuations inflated by huge demand.
2 A big year for biotech flotations Copyright © 2021 Evaluate Ltd. All rights reserved.That trend has continued so far in 2021: The Chinese Car-T play Gracell Biotechnologies bumped up its offering by
25% to raise $209m, while the targeted oncology company Cullinan banked $250m after upsizing its offering and
pricing above range.
At time of writing Sana Biotechnology, a Hans Bishop-backed company, was poised to float. Despite having an
entirely preclinical pipeline, which is unlikely to move into the clinic before 2022 at the earliest, a multi-billion-dollar
valuation at IPO looks likely.
Biotech IPOs by quarter on western exchanges Source: Evaluate®. January 2021
6 Amount raised ($bn) 32
IPO count
26
4.5 4.69 24
23
21 21
Amount raised ($bn)
20
18
IPO count
17
3 16
3.28 3.21 16
14 14 14
13 13
12 12
2.25
10
1.91 1.95 9
1.84
1.5 8 8
7 1.51
6 1.38
1.23 1.26
1.03 0.99 1.05
0.59 0.68 0.54 0.60
0.46 0.45
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2017 2018 2019 2020
Year
Of course, this huge demand also creates huge expectations, and the pressure is on for new issues to perform this
year. The track record of these freshly floated drug developers will be a major influence on investor appetite in the
coming months.
3 A big year for biotech flotations Copyright © 2021 Evaluate Ltd. All rights reserved.A more detailed look at 2020’s stats shows just how impressive last year was. The average amount raised per
IPO easily set a record, with a staggering 55 companies raising more than $100m, and 35 of these bringing in
over $200m.
With demand so high it is not surprising that these start-ups are raising what they can, while they can. But there are
quite literally huge downsides to the valuations that are being set and, as experienced biotech investors know, the
failure rate in this industry is high.
Biotech IPO market by year Source: Evaluate®. January 2021
Year No. of IPOs Amount raised Avg. amount No. raising
($bn) raised ($m) >$100m
2020 76 12.7 167 55
2019 55 4.9 88 17
2018 68 7.2 106 31
2017 50 3.9 77 15
2016 45 2.3 51 3
2015 78 5.1 65 17
For more detailed analyses see these articles:
After a big year, biotech flotations Few clues to flotation fever
have much to do in past performance
4 A big year for biotech flotations Copyright © 2021 Evaluate Ltd. All rights reserved.Covid or not, venture financing breaks records
A year that started with cautious optimism over biotech venture financing has wound up
breaking records. Private biotechs ended 2020 having raised just under $20bn, eclipsing even
the boom year of 2018, the latest EvaluatePharma data reveal.
Full-year totals seem to have blown even the rosiest expectations out of the water. The numbers are so stunning that
it is difficult to find negative trends. If there is one it is that 2020’s absolute number of VC rounds was around the 450
mark, despite the record-breaking total cash raised; this is lower than 2017’s 528, and even than the 492 rounds in
2014, when only a total $7.2bn was raised.
This analysis includes only companies developing human therapeutics.
Quarterly biopharma VC rounds Source: Evaluate®. January 2021
8 200
$100m+ Other rounds
$50m - $100m Count
7 175
155
6 5.01 5.73 150
Combined investment ($bn)
140
137 137
4.88
128 127 4.73 4.75
Number of rounds
5 124 4.78 125
120 4.30 121
118
3.96 117 115 112 4.34 111
108 106 4.10 3.60 105
108
4 3.84 3.77 98 97
100
3.42
3 2.84 2.97 75
2.78
2.43 2.39
2.17
2 50
1 25
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2017 2018 2019 2020
Year
The clear trend is towards ever bigger venture rounds. Indeed, the average financing per round last year came in at
nearly $45m, almost $10m higher than the average in 2019.
This rising average was driven by a few truly monstrous individual company raises. The secretive cell therapy player
Lyell Immunopharma topped the first quarter with a $493m raise, while June saw Sana close an astounding $700m
series A round; both companies are linked to Hans Bishop, the former chief executive of Juno.
5 Covid or not, venture financing breaks records Copyright © 2021 Evaluate Ltd. All rights reserved.It was Sana that pushed the second-quarter VC funding total above $5bn – the first time that quarterly total had
been breached in the current cycle. And it was only because of Sana that the third and fourth quarters looked like
a retrenchment; in reality, of course, each period brought in nearly $5bn of private cash.
It seems likely that once all the numbers are in – there are typically a few small rounds that are not announced
until some time after closing – the 2020 VC total will exceed $20bn. What does 2021 do for an encore?
Annual biopharma venture investments Source: Evaluate®. January 2021
Year Investment Financing Avg per No of rounds No of rounds
($bn) count financing ($m) ≥$50m ≥$100m
2020 19.99 448 44.63 154 59
2019 15.12 435 34.76 119 38
2018 17.89 481 39.06 130 38
2017 13.21 528 27.4 76 19
2016 10.44 493 22.51 52 15
For a more detailed analysis see this article:
Covid or not, venture financing
breaks records
6 Covid or not, venture financing breaks records Copyright © 2021 Evaluate Ltd. All rights reserved.Evaluate provides trusted commercial intelligence for the pharmaceutical
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