Biotech listings shows few signs of cooling

This remains a Nasdaq story, however, with Evaluate Pharma capturing only one non-US listing so far this year. Car-T researcher Chimeric Therapeutics raised $35m in Australia in January. European companies are going public, but they are doing so by travelling to Nasdaq. One to chose this route last quarter was Vaccitech, the vaccine spin-out from Oxford University that developed the Covid-19 vaccine being manufactured by Astrazeneca.

Companies are attracted by the deep pools of capital in the US, and a look at the quarterly sums being raised shows little retrenchment in availability.

Where a pullback can be seen is in the price that these news issues are achieving. Last year virtually every IPO managed to achieve an uplift on the initially proposed price range, and many upsized the offerings to raise more than first intended. The graph below suggests that investors are pushing back on sky-high valuations.

The average amount raised over the first half also dipped on last year, from $167m to $158m. This is still way above historical averages, with around three-quarters of IPOs raising more than $100m, a proportion unheard of before 2020.

The performance of these new issues post-float is another big indicator of investor support, and signs of dipping exuberance can be found here. The latest Hans Bishop vehicle, Lyell Immunopharma, is currently trading below its float price, for example.

The fact that the company managed to raise a huge $425m despite being years from the clinic shows that the IPO window is far from closing. While bankers will be carefully monitoring such signals in the coming months, many would argue that restraint on valuations is long overdue.