Focus on US Nasdaq: Market Revival
The global public market surge in 2014 was followed by an all-time high for biotech companies on the US stock markets and European biotech firms showed huge interest in opting for a US listing. However, in 2015 the situation started to change and the biotech IPO boom began to cool off. In 2016, matters deteriorated even further. Now, in 2017, the situation has finally improved as the US stock market offers a far greater number of biotech investors than their European counterparts. For this reason, European biotech companies haven’t lost their interest in IPOs and secondary listings abroad. In total, 35 European biotech companies were listed on Nasdaq by the end of 2017.
Investors’ appetite returns
In 2017, investors showed significant interest in biotech stocks compared to 2016. European biotech companies profited from this trend. They raised total financial proceeds of €2.16bn via IPOs, secondary listings and follow-on financings on the US Nasdaq. This is nearly half (42%) of the total capital raised by all European biotech companies in 2017 and highlights the power of biotech-focused investors available through Nasdaq.
US boasts greater IPO volumes
In 2017, 4 European biotech companies raised a total of €324m via IPOs on the US Nasdaq, which is almost twice as much (+97%) compared to 2016 (€164m) and includes Swiss company ObsEva SA (€90m), German InflarX (€85.8m) and UK-based Nightstar Therapeutics (€63.5m) and Nucana Biomed (€84.7m). In the US, average IPO volumes are higher than those on European stock exchanges. In 2017, the US stock exchange average amounted to €81m, almost 60% more than that of European exchanges (€32.7m). The Nasdaq proceedings, however, didn’t top past IPO levels, such as those of UK-based Adaptimmune (€170m) in 2016 or Forward Pharma (€186m) from Denmark in 2014.
Follow-on financings
US investors’ appetite was revived in 2017 following a decline in 2016. The 35 listed companies attracted a combined total of €1.83bn in follow-on financings (see Fig. 12, p. 15), including 5 secondary
listings which alone amounted to a total capital of €553.3m. Compared to their counterparts which are listed on European stock exchanges only, the firms on the US Nasdaq generated significantly morecapital this year and with greater average volumes (US: €81m vs. Europe: €32.7m).
Drug developers aim for US Nasdaq
Drug developers, in particular, opt for a US listing, which is clearly associated with their high demands for capital. Newcomers to the Nasdaq in 2017 are active in the field of reproductive health (ObsEva), cancer therapeutics (Nucana Biomed), blinding eye diseases (Nightstar Therapeutics) and inflammation (InflarX). The same applies for the secondary listings: respiratory diseases (Verona Pharma), metabolic diseases (Zealand Pharmaceuticals) and cancer/autoimmune diseases (argenx, ERYtech, Ablynx).
Greater market capitalisation
In 2017, 15% of the 233 listed companies traded their shares on the US Nasdaq. The companies have a combined market capitalisation of €32.19bn, which means an average of €975m. This is almost one third higher (€630m) than the market cap of the firms listed in Europe only. The lion’s share of US-listed companies (48.5%) operate in the small-market capitalisation range between US-$300m and US-$2bn with a further 36.4% of the firms within a micro cap range between US-$50m and US-$300m. Similar to their European-listed counterparts, only a few companies (15.2%) fit in the mid-market cap range between US-$2bn and US-$10bn. A big difference between both markets, however, is that in the US there are no companies in the nano-market cap below US-$50m. This suggests that the US-listed companies have a slightly higher degree of maturity.
US boasts greater IPO volumes
In 2017, 4 European biotech companies raised a total of €324m via IPOs on the US Nasdaq, which is almost twice as much (+97%) compared to 2016 (€164m) and includes Swiss company ObsEva SA (€90m), German InflarX (€85.8m) and UK-based Nightstar Therapeutics (€63.5m) and Nucana Biomed (€84.7m). In the US, average IPO volumes are higher than those on European stock exchanges. In 2017, the US stock exchange average amounted to €81m, almost 60% more than that of European exchanges (€32.7m). The Nasdaq proceedings, however, didn’t top past IPO levels, such as those of UK-based Adaptimmune (€170m) in 2016 or Forward Pharma (€186m) from Denmark in 2014.
This text is part of BIOCOM's "6th Analysis of European biotech companies on the stock markets: US vs. Europe":
