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Healthcare IPOs in 2018 outearn 2017's haul despite dip in volume

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Healthcare IPOs in 2018 outearn 2017's haul despite dip in volume

The year 2018 saw 186 healthcare IPOs globally — slightly fewer than 2017's 190 but earning over $9 billion more, according to data compiled by S&P Global Market Intelligence.

The fourth quarter of 2018 alone saw 56 healthcare companies going public — the most for any quarter during the year — pushing aggregate gross proceeds for the year to $24.08 billion. Healthcare IPOs generated $14.88 billion in 2017.

Aggregate gross proceeds during 2018 were also the highest in the last five years. The year 2014 comes second in terms of gross proceeds with 216 IPOs raising a total of $18.38 billion.

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Fourth-quarter IPOs were led by China-based medical device company Shenzhen Mindray Bio-Medical Electronics Co. Ltd., which fetched $858 million in its $7.06-per-share IPO.

Moderna Inc. claimed the spot for second-highest earning IPO in the fourth quarter with $604.4 million. The Cambridge, Mass.-based developer of messenger RNA therapies priced its offering at $23 per share.

Meanwhile, Suzhou, China-based biotechnology company Innovent Biologics Inc. raised $421.4 million, while Shanghai-based cancer therapy developer Shanghai Junshi Biosciences Co. Ltd. picked up $393.2 million when the companies went public in Hong Kong during the quarter.

Hong Kong has wooed biotechs to list in the city after it tweaked its listing rules to allow pre-revenue companies. Innovent and Junshi were the fourth and fifth pre-revenue companies to list under the new scheme.

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South Korea-based biotech PharmAbcine Inc., which develops therapies for cancer and inflammatory diseases, had the highest priced IPO of the fourth quarter on a per-share basis, at $53.28 apiece. The company raised $42.6 million in the offering.

Exopharm Ltd. had the biggest IPO "pop" of the quarter, on the Australian Stock Exchange. The Melbourne-based developer of regenerative medicines saw a 160% jump in its stock price on the first day of trading, raising $5 million when it went public for 14 cents per share.

Redwood City, Calif.-based Guardant Health Inc. also garnered significant investor enthusiasm on its first trading day, seeing a 69.5% IPO pop once it went public. Guardant, which offers noninvasive cancer diagnostics, raised $237.5 million in its IPO priced at $19 per share.

Alternatively, some IPOs did not generate the same level of investor enthusiasm. Australian biotech Fiji Kava Ltd. and South Korean healthcare supplies company T&R Biofab Co. Ltd. saw their stock prices drop by 40% and 30.6%, respectively, on their first day of trading.