Biotech boom boosts global healthcare IPOs’ value despite volume decline

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A healthy biotechnology market has lifted the overall healthcare listing space in terms of value in the past year despite a massive decline in the overall number of listings worldwide.
Global law firm Baker McKenzie analysed the initial public offerings in the healthcare sector last year and found that value grew by 2% despite a 39% decline in the volume of listings.
The biotechnology sector, which includes healthtech IPOs, accounted for 45% of the US$17 billion (about $23.09 billion) total capital raised in 2016. The US$8.16 billion (about $11.08 billion) raised by biotech companies were from 27 deals, data from Baker McKenzie reveal.
The healthcare IPO space, however, continues to see fewer and fewer deals. For example, the most active sector in the space in terms of volume was pharmaceutical companies. 44 of them listed last year, but the number is nearly 50% lower compared to 2014 and 2015, Baker McKenzie notes.
Overall, however, the healthcare listing space still was a bright spot in 2016 when the general market was muted, noted Ben McLaughlin, Global Chair of Baker McKenzie's Healthcare group.
“While healthcare IPOs volume slowed in 2016, the sector outperformed in a poor year for IPOs generally,” McLaughlin said.
“Biotech companies had a record year, building on year-on-year growth. Healthtech companies seeking additional capital to commercialise their technologies globally and fund further research and development, are becoming more active as the potential for personalised healthcare attracts interest and investment.”
Included in the biotech group are the surging healthtech IPOs. According to the firm’s data, eight healthtech listings were made in 2016 with an aggregate deal value of US$2.4 billion (about $3.26 billion).
London is also said to have topped Nasdaq in healthcare IPO value for the year with the UK bourse registering US$4 billion (about $5.43 billion) in six healthcare IPOs compared to Nasdaq’s US$ 2.4 billion (about $3.26 billion). In deal volume, however, Nasdaq still dominated with 39 listings.

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