Biotech companies seeing IPO market success

The GLP aggregated and excerpted this blog/article to reflect the diversity of news, opinion and analysis.

The trading debuts of two newly public biotech companies brought the grand total for 2016 to four, but it may also mark the start of a new IPO trend.

The initial-public-offering market was closed for business in January as global stock markets tanked, and companies are tentatively dipping their toes in the water now. The pace of IPOs is down 80% from the same time last year, when 20 deals had already priced by this time, according to Renaissance Capital, a manager of IPO-focused ETFs. The companies that have listed in some tough market conditions are all in the biotech sector and are not typical IPOs, due to the high levels of insider buying propelling them.

For example, the first company to trade after pricing its IPO was Proteostasis Therapeutics Inc., a company working on treatments for patients with protein-processing diseases. Proteostasis had existing investors indicating interest in buying up to $30 million of its stock, or up to 60% of the initially proposed deal, according to Renaissance Capital.

AveXis Inc., a gene-therapy company, had insiders express interest in buying up to $30 million of its stock, which would represent up to 35% of the deal.

Because of the support from inside investors, Kathleen Smith, principal at Renaissance Capital, called these offerings “quasi-IPOs.”

“We’re seeing an increasing amount of insider buying [in biotech],” Smith said. “Other IPOs don’t seem to have that angle to such an extent.”

Read full, original post: Only biotech companies have braved IPO market this year – with insider help

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