• Recent acquisitions and clinical trial stumbles show the high-risk, high-return nature of biotech IPOs.
Betting on a biotech buyout...
The billion-dollar biotech buyouts continue. News broke on Monday that Novartis agreed to buy gene therapy bitoech AveXis (AVXS) for $218 per share, or $8.7 billion. AveXis went public in February 2016, by offering shares at $20 with a market cap of $458 million.
A number of other gene therapy biotechs rallied on the news, including 2015-2018 IPOs Spark Therapeutics (ONCE), Audentes Therapeutics (BOLD) and Nitestar Therapeutics (NITE).
...and hoping to avoid clinical trial failure
Also on Monday, January 2018 IPO Menlo Therapeutics (MNLO) plummeted 77% after announcing that its treatment for severe skin itch failed to meet its primary or key secondary efficacy endpoints. It is now the worst-performing IPO of 2018 with a -52% return; it closed Friday as the year's second-best performer.
Another high-flying 2018 IPO, Solid Biosciences (SLDB), had a similar drop in mid-March when the FDA placed a full clinical hold on its trials (the prior partial clinical hold was cited as a key risk in our pre-IPO analysis).
IPO Pro's streamlined dashboard features the daily, weekly and monthly movers in the IPO market. See Monday's snapshot:
AveXis' acquisition is only the latest in a series of large M&A deals in the biotech space, particularly in gene and cancer therapy:
| Recent Billion-Dollar Buyouts of Biotech IPOs | |||
|---|---|---|---|
| Biotech Business |
Acquirer Amount Paid |
IPO Date IPO Price |
Acquisition Date Acquisition Price |
| AveXis (AVXS) | Novartis $8.7 billion |
02/10/16 $20.00 |
04/08/18 $218.00 (+990%) |
| Early-stage biotech developing a gene therapy for spinal muscular atrophy. | |||
| Ablynx (ABLX) | Sanofi $4.8 billion |
10/24/17 $17.50 |
01/28/18 $55.00 (+214%) |
| Developing single domain antibodies derived from llamas for various diseases. | |||
| Juno Therapeutics (JUNO) | Celgene $9.0 billion |
12/18/14 $24.00 |
01/22/18 $87.00 (+263%) |
| Developing T-cell therapies for lymphomas, leukemias and other cancers. | |||
| Ignyta (RXDX) | Roche $1.7 billion |
03/13/14 $9.15 |
12/22/17 $27.00 (+195%) |
| Clinical-stage biotech developing targeted cancer therapeutics. | |||
| Kite Pharma (KITE) | Gilead $11.9 billion |
06/19/14 $17.00 |
08/28/17 $180.00 (+959%) |
| Biotech developing cancer immunotherapies with the National Cancer Institute. | |||
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