The impending US election and debates over drug pricing haven’t dimmed enthusiasm for new biotech stocks. So far, 2020 has been a surprisingly good year for biotech companies debuting on Nasdaq.
Four companies—Beam Therapeutics, Black Diamond Therapeutics, Revolution Medicines, and Schrödinger—all originally filed to raise $100 million from their initial public offerings (IPOs). But as their offering dates neared, all four amended their IPO estimates to about $180 million. When the bell rang, the results exceeded even those increased expectations: each had raised more than $200 million.
What’s more, as of the market close on Feb. 19, shares in the four companies are trading up at least 50% over the offering prices. The Nasdaq Biotechnology Index is up only about 2% since the year began.
The firms are all developing hot technologies or tackling popular drug targets—such as the tough-to-drug protein KRAS, which is implicated in many cancers. Beam is developing CRISPR base-editing therapies for rare genetic diseases. Black Diamond, Revolution, and Schrödinger are pursuing small-molecule drugs for cancer.
Other drug firms have also landed strong IPOs. Arcutis Biotherapeutics, which develops skin disease drugs, raised $183 million in a January IPO, passing its initial and amended estimates of $100 million and $152 million, respectively.
New firms hope to get on the bandwagon. The rare-disease company Imara recently filed to raise $86 million, and the gene therapy start-up Passage Bio filed Feb. 3 for a $125 million IPO and amended the estimate to $153 million 2 weeks later.