It’s time to get used to biotech IPOs in Europe. French diabetes specialist Poxel successfully raised EUR 26.8 million in its IPO on Euronext Paris at the beginning of February. The latest drug candidate of the ex-Merck Serono unit is Imeglimin, a new class of oral antidiabetic agents which completed Phase II tests. Another successful IPO was performed by Belgian Bone Therapeutics. The regenerative medicine company raised EUR 32 million in an oversubscribed listing on Euronext Paris and Brussels. Another four companies have announced plans for a listing on a European stock market in the upcoming weeks. Two of them—Evgen and Redx—opted for the Alternative Investment Market (AIM) in London. Another two firms chose Euronext: the Belgian regenerative medicine company Bone Therapeutics published plans to float in Brussels and Paris, the ex-Merck Serono unit Poxel will go public in Paris. Some movement also takes place in Scandinavia: Norwegian Nordic Nanovector applied for listing on the Oslo Stock Exchange, Swedish Cantargia plans to launch an IPO on NASDAQ First North in Stockholm. Other European biotech companies still feel safer in the tried-and-tested US waters. Danish clinical stage biopharma company Ascendis Pharma has successfully raised USD 108 million (EUR 95.5 million) with its upsized NASDAQ IPO the end of January, while Irish animal health specialist Nexvet is waiting in the wings with its own USD 58 million (EUR 51 million) NASDAQ IPO plans. Oxford-based drug developer Summit Corporation, which is listed on AIM since 2004, announced plans for a dual listing in the US.
IPO boom continues
This year kicked off where the last year ended. In 2014, the European biotech industry experienced a stock market boom. A total of EUR 2.4 billion was poured into biotech companies in Europe via the stock exchange, an increase of 25% compared to the previous year (2013: EUR 1.9 billion). The number of biotech IPOs in Europe tripled to 15. A total of seven companies opted for a listing in the US. These are the key findings of the report “Comparative Analysis of European Biotech Stock Markets 2015”, which was presented at the end of January by BIOCOM AG in Berlin, Germany. “The record numbers of 2014 show two things: biotech is a profitable investment again, and the US biotech boom has reached the European public markets,” said Boris Mannhardt, CEO of Berlin-based market analyst BIOCOM. “This is underlined by the wave of six European biotech IPOs, expected to take place in the first two months of 2015.”
Euronext and AIM in the lead
According to the BIOCOM report, a total of 150 biotech companies with a market capitalization of EUR 66 billion are currently listed on the 15 most important stock exchanges in Europe. The majority of companies are traded in London (33) and Paris (32). In the aftermath of the crisis years 2011 and 2012, all indicators are now showing signs of a significant upswing throughout all trading centers. “The cross border exchange Euronext and the AIM in London are obviously the most attractive. They are at the top of our ranking,” said Mannhardt, summarizing the main results. The cross-border exchange NASDAQ OMX and the Swiss Stock Exchange follow in third and fourth place. The stock exchange in Frankfurt, Germany, is still waiting for a biotech IPO, the last one dates back to 2007. Halle-based Probiodrug which went public in October 2014, opted for Euronext (Amsterdam), mainly due to existing Dutch investors.
Private venture capital market experiences revitalization
Compared to the US, the European public biotech sector in general still lacks maturity. Turnover and market capitalization of the European companies are significantly lower. According to the BIOCOM report, every second biotech company operates in the nano cap range having less than USD 100 million. Only 10% of the firms are above the market cap barrier of USD 1 billion. “Nevertheless, we can see a remarkable upswing. With the stock exchange as an alternative route, the private venture capital market is also experiencing a revitalization,” said Mannhardt. Together with a new wave of private funds pouring fresh venture capital into the life sciences market, the overall financial situation for European biotech companies looks more promising today than it has at any point in the recent past.
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