Otonomy Raises $100 Million In Up-sized IPO
Otonomy a San Diego based company has raised $100 million in an up-sized initial public offering in a quiet week for similar deals. Otonomy develop treatments for diseases of the ear and have sold one million shares, which is a lot more than what was expected. The result of this has meant the Otonomy priced top of its target range, with this strong debut has backed up that the public markets are very open to biotech IPOs.
2014 is quickly becoming the best year ever in terms of life sciences IPO in the US. Companies have been able to benefit from the strong capital markets as well as the JOBS Act, which has made it easier for companies to go public by allowing them privately to seek potential investors to test interest before making public their intention to go public. So far 77 life sciences companies have gone down this route and have raised $5.8 billion though IPOs on US exchanges, this is a vast improvement from 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. An as a group; biotech or therapeutics companies have seen a rise in 4.5% 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 at 2.1% above their offering price, with 36 of those companies trading above three flat and 38 below their offering price.
IPO momentum has slowed of recent due to concerns over the sector being overvalued and a push-back on the ever increasing drug prices. But still with these concerns there are still plenty of companies waiting to complete announced IPOs. The valuations reflect the current realities of the market and the traditional supporters of life science IPOs remain committed to new issues of innovative companies. There is currently more that two dozen companies waiting in the IPO queue and this has increased the likelihood of IPOs reaching a 100 in 2014 a real possibility, which was unthinkable at the beginning of the year.