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No trial, no problem: Biggest week for preclinical biotech IPOs ever

June 9, 2020

Three large preclinical biotech IPOs are slated to begin trading on Friday, the most ever in a single week.

Vaxcyte (PCVX) is developing next-generation pneumonia vaccines, a $7 billion market, and expects to begin clinical trials for its lead candidate in the 2H21. Avidity Biosciences (RNA) expects to submit an IND in 2021 and begin a Phase 1/2 trial by the end of the same year for its lead candidate, a therapy for a rare muscle disease. Generation Bio (GBIO) plans to begin IND-enabling studies in 2021 for preclinical gene therapy candidates for two rare liver diseases.

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Three preclinical biotechs have already gone public this year, selling investors on potential advances in immuno-oncology (BDTX), gene editing (BEAM), and gene therapy (PASG), but without human trial data. All three upsized their offerings and priced at the high end or above the range, and now command billion-dollar market caps. They average a first-day return of 47% and a total return of 68%, compared to 2020’s 14 clinical-stage biotechs, which average 24% on day one and 81% from the IPO.

Preclinical biotech IPOs have become larger and more common. 23 preclinical biotechs have gone public since 2017, and activity has grown year-to-year. After this week, five preclinical biotechs will have raised $150 million or more in 2020, compared to just two during the previous three years (RUBY in 2018 and DNLI in 2017).

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