In the excitement of today’s biotech IPO market, and the bullish period since 2013, it’s almost hard to remember how painful the equity capital markets were back in the day.
When I began my career in venture capital in 2004, the IPO markets were just opening up after the fallout from the bursting of the tech and genomics twin bubbles in 2001. Great companies like Atlas-backed Alnylam and Momenta were going public. Sixteen years later those two are a $15B commercial-stage biotech and a recent $6.5B acquisition by J&J, respectively – very successful biotechs by any measure. But most folks forget that their IPOs were really painful: both priced their offerings ~50% below the mid-point of the expected price range (here, here). This wasn’t an uncommon occurrence.
The IPO markets for most of the 2000s never warmed up much. Jazz Pharma, now a high flying $8B company, “took it on