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San Diego-based Otonomy raised $100 million in an upsized initial public offering during a quiet week for such deals. The developer of sustained release treatments for diseases of the ear sold one million shares more than it had planned and priced at the top of its target range. Its strong debut confirms that the public markets remain open to biotech IPOs. 2014 is shaping up to be the best year ever in the United States in terms of the number of life sciences IPO. Companies have benefited from the strong capital markets and the JOBS Act, which has eased the path for going public by allowing companies to shop their deals confidentially with potential investors, testing their interest before making public their intention to go public. So far this year, 77 life sciences companies have raised $5.8 billion through IPOs on U.S. exchanges, topping the 52 life sciences IPOs in 2013, and 66 biotech IPOs in 2000.
Biotech has been the most active sector for all IPOs in 2014, according to Renaissance Capital, accounting for 59 of the IPOs. As a group, biotechs, or therapeutics companies, are up 4.5 percent on average from their IPO price, with 28 trading above, three flat, and 28 trading below their offering price.
In comparison, 77 life sciences IPOs were trading on average 2.1 percent above their offering price with 36 companies trading above, three flat, and 38 trading below their offering price.
Although the IPO momentum has slowed, mainly due to worry over the impact of a pushback on rising drug prices and concern that the sector is overvalued, there are still plenty of companies waiting to complete announced IPOs. Valuations reflect the current realities of the market and the traditional supporters of life sciences IPOs remain committed to new issues of innovative companies. With more than two dozen companies in the IPO queue, the likelihood that the number of life sciences IPOs will reach 100 in 2014, unthinkable at the beginning of the year, is now certainly in the realm of possibility.
August 18, 2014
http://www.burrillreport.com/article-otonomy_raises_100m_in_upsized_ipo.html
