Is the post-COVID biotech IPO boom slowing down?

The biotech IPO boom seems to be slowing. In this post, we present summary stats on the venture-backed biotech IPO market. The post also includes a table of IPOs with post-money valuation, and a tool where you can see stock charts comparing post-IPO performance to the performance of biotech indices.

Key takeaways:

  • After the Fed's aggressive response to COVID in March 2020, there have been a record number of biotech IPOs.
  • However, returns from these IPOs are not great: most of these IPOs see a nice IPO pop on day one, but very little or even negative returns thereafter.
  • The XBI biotech index's poor performance vs. the NASDAQ and S&P 500 has started rippling through the IPO market, with 2H 2021 IPOs down significantly from 1H 2021.
  • IPO valuations and step-ups had been increasing until 2H 2021, but are now decreasing. Until the IPO market recovers, private companies will likely face tougher funding terms.

The data include IPOs of venture-backed biopharma startups that raised at least $50M on NASDAQ or NYSE from FY2018-1H2021.

Summary statistics

The biotech IPO market has been strong for some time, but really took off during COVID. The increase in biotech IPOs post-COVID has tracked the strong performance of the broader market driven by the Fed's aggressive response to COVID.

The sustained underperformance of biotech equities in 2021 is starting to drag on the IPO market. November was a particularly bad month for biotech, and Q4 2021 IPO proceeds were the lowest in almost 2 years.

IPO valuations have also increased, from an average post-money of $500M in 2018 doubling to $1B in 2021 (the outlier valuations in Q4 2018 and Q3 2019 were driven by the IPOs of Moderna and BioNTech respectively).

Starting in 2H 2021, however, valuations have begun to decrease.

IPO prices are generally a 1.5-2.5x step-up to the last private round. Most IPOs price at a 1.5x step-up, but outlier IPOs drive the average step-up higher.

IPOs generally open around 20% higher than the IPO price. Since COVID, however, IPO pops have been larger. Most IPOs don't appreciate significantly in the year post-IPO: the median IPO price one year post-IPO is around the opening price on the first day of trading (with the exception of the 2H 2019 vintage, which benefited from the COVID bump). Dispersion of cohort returns increases over time.

See performance of recent biotech IPOs

Search a ticker below to see stock performance since IPO compared to biotech indices.

Currently you can only search for VC-backed biopharma companies that went public since January 2018. Returns are normalized to closing price on the day of IPO (as opposed to the IPO returns chart above, which shows return based on the IPO price).

IPO valuation

Click "Load IPO data" to load a list of recent IPOs with data on amount raised and post-money valuation.

To view data on therapeutic area, modality, development stage, private round valuations, investors and more, check out our premium database. You can also sort by therapeutic area, modality and development stage, view performance of private biotech investors, and search private fundings by therapeutic area and development stage.

$ in millions

Company name Ticker IPO date IPO amount raised IPO post-money Therapeutic areas Therapeutic modalities Development stage at IPO