Please login to the form below

Not currently logged in

After December slump, what’s in store for biotech in 2019?

Analysts say 2019 could be a "big year for proceeds if not for deal count"


2018 was a bumper year for biotech investment and particularly IPOs, with 58 new listings crowned by Moderna’s record-breaking $604m offering and an escalation in the number of private rounds as well as the amounts raised.

In the last few weeks of the year however, biotech stocks went on the slide, leaving investors wondering if that is just a short-term correction, or signs of a tougher environment in 2019. Moderna is now trading almost 20% down on its debut price, for example, having been down almost 30% during the holiday period.

With news flow from the sector just trickling in after the holiday period, all eyes are on the JP Morgan conference, which gets underway in San Francisco next week and generally serves as a barometer for sector sentiment for the coming year. JPM2019 will bring together thousands of investors and hundreds of companies from across the healthcare spectrum, from tiny biotechs to big pharma.

The conference generally sees a lot of new technology, data and deals announced and provides commentary on some of the top issues affecting the sector – such as declining R&D productivity, the difficulties biotech companies have achieving profitability once their products reach the market, and of course issues such as drug pricing and the sustainability of economic growth.

2018 is certainly going to be a tough act to follow, and analysts at Cowen said in a recent research note that sentiment is at its lowest for around five years with many investors exhibiting “a bear market mindset”.

All told, last year’s haul of IPOs created a handful of $1bn-plus companies and raised a record $6.3bn, according to a Renaissance Capital’s review, which also found that some of the best-performers in terms of returns were in healthcare, including Allakos, ARMO Biosciences and Inspire Medical.

Healthcare companies also featured among the worst performers however, including Genprex, Menlo and Neon Therapeutics which all suffered steep declines after their debuts. Cowen says that faced with aggressive valuations and swift corrections the mood of some investors towards IPOs has “sunk below disinterest toward anger”.

Nevertheless, Renaissance says biotech IPOs “have been getting bigger, and 2019 could see more well-funded biotechs like Gossamer Bio come public if the poor trading of high-profile Moderna does not dissuade them”. The average deal size was $108m, having already doubled in 2017 to $100m on the tail of a six-year boom for life sciences stocks.

However, Renaissance thinks the outlook for 2019 remains uncertain, although there are plenty of biotechs eyeing listings in the coming year, with the list heavily populated by gene editing and gene replacement firms.

A shock on shares as seen for biotech indices in December generally puts a damper on IPO activity, but it thinks that as long as the broader markets do not sink further, “2019 could still be a big year for proceeds if not for deal count”.

Article by
Phil Taylor

3rd January 2019

From: Sales



PMEA Awards 2020

COVID-19 Updates and Daily News

Featured jobs


Add my company

About Dovetail We’re award-winning specialists in healthcare collaboration that makes patients’ lives better. Combining expertise with a passion for collaboration,...

Latest intelligence

reaching HCPs during pandemic
Reaching patients and HCPs during the pandemic
COVID-19 has caused unprecedented disruption to drug launches, but some pharma companies avoided costly delays by quickly pivoting to digital channels...
#DemandDiversity: Black history in clinical trials: It's more than just Tuskegee [Infographic]
Take a look at this infographic showing some of the most notorious clinical trials and medical research in history....
Looking back at the year when everything changed
COVID-19 has impacted every aspect of our lives, from the way we shop for groceries to the way we conduct work and interact with healthcare providers and our families....