Cell therapy, AI drug discovery highlight 2021’s record year in biotech IPOs – MedCity News

The biotech IPO market has been hot for the past few years, but it set all sorts of new records in 2021. A total of 399 companies priced IPOs in 2021, raising $142.5 billion, according to IPO research firm Renaissance Capital. Those figures made this year the busiest by deal count since 2000, and the biggest ever in terms of proceeds raised.

Healthcare, which includes biotech, was the busiest sector, accounting for 36% of the IPO activity, Renaissance said in its 2021 annual review. The biggest biotech IPO of the year belongs to Seattle cell therapy developer Sana Biotechnology, which was able to upsize an IPO that raised $588 million.

While Sanas IPO total is eye-catching, the sum is also notable because its the largest ever IPO for a company that has yet to reach the clinic. Not so long ago, biotech companies typically waited until they had clinical data before turning to the public markets. Even early dosing data reduces the investment risks.

Sana still doesnt have clinical data. What it does have is a cell and gene therapy technology and leadership from two former Juno Therapeutics executives who steered that company to a $9 billion acquisition by Celgene in 2018. Sana said it is preparing to file multiple investigational new drug applications in 2022 and 2023. That means investors must wait another year or more before the company produces data that could move the companys stock price.

Other cell therapy developers that went public this year include Lyell Immunopharma, Caribou Biosciences, Instil Bio, Talaris Therapeutics, and Achilles Therapeutics. Most of the biotechs in this group had reached at least early clinical testing at the time of their IPOs.

Recursion Pharmaceuticals had the second biggest biotech IPO of 2021. The Salt Lake City, Utah-based company raised $436.4 million to continue clinical development of drug candidates discovered by its AI platform. Similar to Recursion, Exscientia has an AI-based drug discovery platform that it uses to develop drug candidates for partners as well as its internal pipeline. The Oxford, U.K.-based company raised $304.7 million from its IPO. Absci, which uses its AI platform to produce proteins that become drug candidates for its pharmaceutical industry partners, raised $200 million in its stock market debut.

According to Renaissance, IPO filings increased for the third straight year; the 495 IPOs that were filed in 2021 through Dec. 20 is a more than 94% increase compared to the same period last year. The $142.5 billion raised is an 82.2% increase over last years total.

The year was also marked by a surge in companies going public by merging with special purpose acquisition companies (SPACs). Renaissance counted nearly 200 companies such deals. Biotech companies that went public in 2021 via SPAC deals include Nautilus Bio, Humacyte, Ginkgo Bioworks, and Pardes Biosciences.

As we head into a new year, the hot IPO market appears to be cooling off. While the market wont turn completely cold this winter, Renaissance doesnt think investors should expect a repeat of 2021s IPO activity.

Looking forward, we believe the 2022 IPO market will have a slow start and fail to match the past years record pace, but ample IPO candidates are ready to take the leap once conditions improve, the firm said.

Photo: Spencer Platt, Getty Images

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Cell therapy, AI drug discovery highlight 2021's record year in biotech IPOs - MedCity News