Amid a relatively dry IPO year, biotech IPOs have boomed. According to The Wall Street Journal, American biotech IPOs have totaled $9.4 billion so far this year. The total for 2018 was $6.5 billion. And the year is not even over yet.
Investing in IPOs can be both exciting and lucrative, but you have to know which to buy. Today, we're going to show you some of the best biotech IPOs to watch this year.
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Why biotech? As mentioned, biotech stocks have stood out this year, apart from the rest of the IPO market.
Biotech stocks in 2020 have taken the spotlight as investors chase companies working on potential COVID-19 vaccines. But that's just the tip of the iceberg.
The Pilant Therapeutics Inc. (NASDAQ: PLRX) IPO in June began at $16 per share. It rose to $35 by the end of the month. That would have been a 118% gain for some investors.
Forma Therapeutics Holdings Inc. (NASDAQ: FMTX) had an IPO at $20 per share. It shot up 140% in just a few weeks, to $48.
Of course, many stock prices are significantly inflated shortly after IPO. But in these cases, Forma Therapeutics is still up 70% today. And Pilant Therapeutics is still up a healthy 50%.
These aren't just quick gains, but companies with long-term growth potential too.
Innovation in the biotechnology sector is expected to accelerate in the next decade. As health and tech combine, more breakthroughs will be achieved - not just in COVID cures, but in other viral, bacterial, and cancer research.
These are just a few of the top biotech companies that could take the cake in the years to come.
CureVac
CureVac is a German BioTech firm and a leader in developing a potential COVID-19 vaccine. The results of its phase 1 trial are expected by Q4 of this year.
But it also has a number of other candidates underway.
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The company is in phase 1 of testing CV8102, a treatment for solid tumors. It is also in phase 1 for a rabies treatment, CV7202.
The CureVac IPO is expected to raise $245 million. This will total 15.33 million shares at $14 to $16 per share. CureVac stock will price this week. It will trade under the ticker "CVAC."
The firm would command a market value of $2.6 billion at the midpoint of the proposed range.
It has booked $20 million in revenue in the last year. This biotech stock has great potential to grow beyond its IPO if trials succeed.
Inhibrx
Inhibrx is a protein engineering firm developing therapies for cancer and rare diseases. It set the terms for its IPO as recently as Aug. 12.
The company was initially supposed to IPO in November 2019. But that was withdrawn.
Inhibrx plans to raise $102 million. That's 6 million shares of Inhibrx stock between $16 and $18 a pop. It will price Aug. 18, 2020.
Currently, Inhibrx is researching treatments for chondrosarcoma and mesothelioma. They are both in phase 1 trials, with 75 total patients enrolled.
The research for these involves targeting "tetravalent death receptor 5" or "DR5" in cells, which is said to be responsible for many cancers.
The company has taken $6 million in revenue over the last year. But it's just getting started.
Why Startups Can Have an Edge During a Recession
Uber, Airbnb, Slack, Pinterest, and Venmo have something big in common - something other than their big names.
These startups were founded during the last recession.
And now, some of the most iconic companies of our time could launch into Fortune 500s during days like today.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.