It was as recently as February that biotech CEOs were talking enthusiastically to Fierce about a positive “shift in the appetite” for IPOs, while industry insiders predicted a wave of incoming public listings for the likes of late-stage oncology companies.
Those comments were made against the backdrop of the first truly impressive month for biotech IPOs in a while. According to Pitchbook data shared with Fierce, global biotech and pharma IPOs in February generated a combined exit value of $5.57 billion—including $4.7 billion for U.S.-based companies alone—which far exceeded any month in the previous year. They included Aktis Oncology’s $318 million offering and Belgium-based Agomab Therapeutics’ $200 million Nasdaq listing.
Then March arrived and … everything stopped. The steady stream of IPOs evaporated almost as quickly as it had appeared. So what happened?
While the initiation of the Middle East conflict—and the resulting tumult in financial markets—coincided with this IPO drought timeline, there are other potential culprits.
Matt Lane, principal and founder of biotech investor relations advisors Milestone Advisors, suggested a bigger factor may be the “unusually aggressive” M&A environment in recent weeks.
In the last 12 days of March alone, biopharmas pulled off seven transactions worth over $1 billion each. Combined, those deals had a headline value of $29 billion and included Merck & Co. fronting $6.7 billion to acquire Terns Pharmaceuticals and its oral leukemia candidate.
In fact, the M&A frenzy was so intense that a single day, March 31, not only saw Eli Lilly offer $6.3 billion upfront for sleep-focused Centessa Pharmaceuticals, but also Biogen agree to pay $5.6 billion for Apellis Pharmaceuticals and its approved drugs Syfovre and Empaveli.
Lane explained that most biotechs follow a “dual-track” process, where they “simultaneously prepare for an IPO while they’re actively courting sellers.”
The fact that Big Pharmas are so clearly on the hunt for appetizing biotechs means that some companies may be mulling their options rather than racing ahead to the public markets, suggested Lane, who helped hair-loss-focused Veradermics navigate its way to a $256 million IPO in February.
“If I’m a [biotech] board, I really have a fiduciary obligation to explore what are my monetization opportunities,” Lane told Fierce in an interview. “Obviously, a sale can be a very rewarding financial event for a company.”
“Until the pacing of M&A slows down, I don’t see the IPO market picking up meaningfully,” he added.
Brad Stewart, national life sciences leader at business advisory firm BDO, agreed that one of the factors behind the latest IPO lull is “a significant improvement in M&A from large pharma companies.”
“Those companies have had cash for a long period of time, and they’re now finally starting to spend it in significant amounts,” he pointed out.
In fact, Stewart suggested that it was the resurgence of IPOs in February that may have jolted pharmas into parting with their cash in the first place.
“One of the challenges with corporate M&A is there really has to be some driver or pressure for the acquirers to make a decision,” he told Fierce in an interview. “One of the ways that companies introduce that competition is if they file an S1 or are prepared to go public.”
Along with the Big Pharma feeding frenzy, Stewart also pointed to a recent “improvement in VC funding” as another short-term dampener on IPOs. If companies can readily tap private funds to continue advancing their aims without an IPO, some may opt to take that path.
As a law firm that assists biotechs with public listings, Baker McKenzie has its finger on the pulse of IPO sentiment. Adam Farlow, London partner and global head of Baker McKenzie’s capital markets team, and his colleague Roel Meers, a partner in the corporate finance practice group of the firm’s Brussels office, also name-checked the continued availability of venture capital funding as one of the factors weighing on the IPO landscape.
“For higher quality companies with less regulatory and clinical development risk, private (VC and other) funding still seems to be available, and we are seeing private capital stepping in to keep these incredibly important companies progressing their development,” Farlow and Meers told Fierce over email. “This further impacts the need for such companies to seek an IPO.”
They also explained that they “see and hear in our practice that the current macro environment is not conducive to IPOs.”
The elephant in the room when it comes to the macro environment is, of course, the conflict in Iran and its knock-on effect on global markets.
“I think for companies that had already been looking toward that [IPO] pathway it may simply affect their timing,” BDO’s Stewart told Fierce. “Going public in a frothy market, or kicking off that process in a down market, is tough.”
But Stewart doesn’t expect the delay to be permanent, citing “hope that things will improve [in] the macroeconomic condition.”
“I think you’re seeing that over the last week or so, there’s been a pretty decent improvement in the indexes from that perspective,” he added.
Milestone’s Lane also pointed to the indexes to suggest that no long-term damage has been done to the biotech market, with the XBI biotech index continuing to nudge against a five-year high this month.
“If we’re going to be having a dance with Iran every two weeks for the rest of the year about whether we’re going to blow them up or not, that’s going to be disruptive, clearly, for the entire market,” he said. “[But] the XBI is doing quite well, frankly.”
This sanguine approach to the macroeconomic situation appears justified if we look at the IPO momentum in the past couple of weeks. While March was a desert for listings, recent days have seen the likes of neuro biotech Seaport Therapeutics and clotting company Hemab Therapeutics both set out IPO ambitions, with obesity-focused Kailera already pricing its own upcoming offering at north of $500 million.
So are IPOs back already?
“The phone is definitely still ringing in terms of people wanting to talk about getting ready for an IPO,” Lane said. “So I do think there’s still that demand there.”
Stewart agreed that public listings remain on the menu for biotechs seeking fresh capital.
“Companies are looking at every option available to get the capital they need to grow [and] to continue to operate their businesses, to continue clinical trials,” he said. “Those can come from a multitude of sources—IPOs certainly are one of them.”
In fact, Stewart isn’t ready to write off predictions of 2026 being a solid year for biotech IPOs, especially if Big Pharma M&A starts to slow down as the most prominent acquirers “digest those and get a real sense of what they purchased and what their competitors purchased.”
“I think we’re about on track,” he said. “This turmoil is unexpected, but we’ve got a long time before the end of the year—I think you’ll see people continuing to IPO.”
