Investors flock back to biotech after a long, cold spell
The deep freeze in biotech is beginning to thaw. About half a dozen biotechnology companies have gone public since the start of 2024, with some raising hundreds of millions of dollars. The jump-start to the new year is a welcome sign for the industry after a challenging two years fueled by layoffs, scientific hurdles and rising interest rates, investors say.
Fewer than 20 companies went public in both 2022 and 2023. Biotechs have attracted more than $6 billion in follow-on financing since the start of the year through mid-February, which Jefferies analysts say is a record-setting pace—one that has already exceeded each quarterly amount recorded since the second quarter of 2021. Venture capitalists have invested $3.2 billion in biotechs this year through the middle of February, compared with about $3 billion during the same period in 2023, according to data from research firm PitchBook.
“The healthy market is back," said Jordan Saxe, head of healthcare listings at Nasdaq, “and it’s not just a fad." Among the startups drawing interest from investors are those further along in developing their drug treatments—a change from prior years when unproven drugs found success entering the market. Companies filling up with cash also include firms chasing some of the hottest areas in biotech research, such as cancer, weight loss and nonopioid pain treatment. Kyverna Therapeutics raised more than $337 million in net proceeds during its recent market debut to fund work developing the company’s autoimmune-disease drugs, Chief Executive Peter Maag said.
Kyverna uses the cellular-therapy technology known as CAR-T, which has shown success in some cancers. “It took us five years to become an overnight success," Maag said. “The reception was
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