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In the rapidly involving field of biomedical science, researchers and clinicians spent tremendous effort discovering novel components, revealing new cures, and generating up-to-date medications that can benefit the public. Like all startups, one of the most important processes for biomedical entrepreneurs is IPO. This blog will make a brief introduction to biomedical IPO trends based on data from the last four years.

According to Investopedia, IPO (Initial Public Offerings) signifies the transition of a company’s process from private to public space for the first time, in which the shares of the company will be made available to the public. It is the strategy for the early investors and the founder of the company to exit (Fernando, 2024). In the past four years, as the pandemic swiped across the globe, it has, to a huge extent, reshaped the IPO market, especially in the biotech field.

Biotech IPO activities reached their climax in 2021, in which 146 companies (98 for traditional IPOs, and 48 for SPACs) raised 31.61 billion dollars throughout the year (IPO tracker, 2021). However, the trend cooled down in the coming two years. A rapid fall in the number of companies exited resulted in the shrink of the market value to 3.26 billion dollars (IPO tracker, 2022) and then 2.74 billion dollars (IPO tracker, 2023). This is the lowest two years since 2011-2012. Moreover, the share price of the top 10 biotech companies exited in 2021 also encountered a great leap, resulting in a nearly 40% share price loss. Among them, only Verve Therapeutics has seen an increase in its share price (Armstrong, 2022).

The major reason for this trend in the IPO market is the pandemic. Since the pandemic hit in 2020, at the forefront of the industry affected by COVID-19, the peaked IPO performance signifies the industry’s tremendous interest in the biomedical market. This also led to the rising trend of SPACs (Special-Purpose Acquisition Company) instead of the traditional IPO activities. However, followed by the economic downturn in the two years after the peak, investors grew more cautious due to the uncertainties of the pandemic surroundings, which led to the downfall of the market.

In 2024, Biotech startups now face a severe question: will it get better in 2024? As the most half of the year has passed, fortunately, the answer is yes. The IPO market is recovering from the dramatic two to three years when the market price was gripped in the hands of the pandemic. The reason for this recovery is not only benefited by the improving global capital market but also the ongoing innovations in the industry. The biotech sector is characterized by ongoing advancements in therapeutic strategies and modalities, which are attracting significant investor interest. Innovations across the globe promise to translate into impactful medicines, appealing to investors searching for breakthrough technologies or blockbuster drugs. The strong desire for innovations affected both sides on the scale: the fundamental value of curing diseases as well as improving patients’ outcomes (Siddiqui, 2024).

Additionally, the global focus on healthcare improvement post-pandemic has directed more funds towards biotech research and development. Governments and private investors are recognizing the critical role biotech plays in addressing current and future health challenges, resulting in increased funding and support for biotech initiatives. This financial backing is crucial for sustaining the momentum of the IPO market recovery.

This upward trend signals a strong potential for continued growth and innovation within the biotech industry, highlighting its critical role in addressing global health challenges. In conclusion, following a grand vision on the way, the industry keeps moving forward despite a periodical downfall. As the world has recovered from the pandemic, we march forward for a brighter future for everyone.