Three Biotechs Garner $700M in Rare IPO Surge

Three emerging drug companies collectively amassed over $700 million through initial public offerings (IPOs) on Thursday, marking a significant burst of activity following a relatively quiet summer for biotechnology firms entering public markets. Cancer-focused Bicara Therapeutics led the pack with a $315 million IPO, the third-largest of the year according to BioPharma Dive data. Zenas BioPharma, specializing in autoimmune treatments, followed with a $225 million stock sale. MBX Biosciences, which focuses on endocrine and metabolic disorders including obesity, raised $163 million.

Each of these companies met or exceeded their projected funding targets. Bicara increased its offering size by 25% before pricing and still sold more shares than initially anticipated. Zenas and MBX also upsized their IPOs. This trio of IPOs stands out in 2024, a year that has seen 18 biotechs price IPOs—a figure consistent with the previous two years but significantly lower than pre-pandemic levels. BioPharma Dive data reveals that more than half of these companies are currently trading below their initial offering prices.

The pattern of IPO activity this year has been marked by long dry spells interrupted by bursts of activity. The last similar occurrence was in early February, when cell therapy developer Kyverna Therapeutics, gene editing company Metagenomi, and anti-aging startup Telomir Pharmaceuticals collectively raised about $420 million over two days.

The companies that have successfully gone public tend to be in later stages of development, with drugs already in human trials. However, the market remains challenging even for these firms. In recent months, there have been more acquisitions of private biotechs than IPOs, suggesting that young drug developers and their investors are opting to sell rather than go public. Established pharmaceutical companies are capitalizing on these acquisitions, finding valuable opportunities in mature startups that haven’t yet gone public.

Despite the increase in private acquisitions, many startups continue to rely on later funding rounds to remain operational, waiting for a more favorable market environment to go public. The timing of their market entry may be affected by the upcoming U.S. elections in November and uncertainties surrounding interest rates.

Jefferies analyst Michael Yee noted in a summer investor report that a rapid market recovery is unlikely until these macro uncertainties are resolved. However, he anticipated an increase in companies going public in early 2025.

Thursday’s IPOs could be a precursor to future market trends. Each of the three companies secured substantial venture investments before testing the waters on Wall Street, and all have drug candidates in Phase 1 or later stages of testing.

Bicara is developing a bifunctional antibody drug for head and neck cancer and plans to start a late-stage trial with Merck & Co.'s Keytruda for newly diagnosed patients either later this year or early next year. The company also intends to test the drug in other solid tumors.

Zenas BioPharma is benefiting from growing interest in immunology drugs. Its dual-targeting antibody is in Phase 3 trials for IgG4-related disease and Phase 2 for a specific type of anemia. The company may soon initiate mid-stage trials for multiple sclerosis and lupus. Zenas’ IPO marks the fifth immune drug developer to go public this year, the highest number since 2021.

MBX Biosciences focuses on metabolic diseases, a field attracting increased investment. Its leading drug is in a Phase 2 trial for hypoparathyroidism. The company is also testing a treatment for complications from bariatric surgery and has a preclinical obesity drug in development.

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