Bay Area Firms Raise $215M in One Day

On July 17, four Bay Area life science firms raised $215 million between an IPO, a follow-on and capital investments.

Congratulations to OncoMed Pharmaceuticals, which raised $81 million in its public offering.  NGM announced $50 million in a series C round. AcelRx raised $44 million in a follow-on offering and gene-therapy company Audentes stormed out of the gate with a $30 million series A round.

Xconomy’s Luke Timmerman set the stage with his breakdown of the IPO rush. With nearly 25 companies going public so far this year, more than double that of the previous year, Timmerman said “it’s a good news/bad news story, depending on where you stand, and how far you look out into the future.”

“First, the good. The IPO surge is a vote of confidence in biotech from generalist investors who have spent years ignoring the industry. It’s good news for biotech entrepreneurs and venture capitalists who back them. A lot of money will get pumped into researching and developing drugs for diseases that have been long neglected…”

Timmerman does a good job of highlighting the reality: “This IPO party won’t last long, probably no more than a few months. There are only so many good private companies worthy of graduating to the public markets. If the past is any indication (remember the genomics craze of 2000?), there will be a hangover when it ends. Quite a few investors, big and small, will lose money and lose interest. Companies would be wise to fill up their coffers now, and stay disciplined in their spending.”

Another perspective comes from Casey Research. The July 25th article “Is Biotech Funding Drying Up” highlighted the more rosy side of the Q2 comeback.

Writes Research Analyst Adam J. Crawford:

“Three months and another MoneyTree report later, and my, how the tables have turned! MoneyTree‘s Q2 report showed a 41% sequential increase in VC investment in biotech, from $902 million to $1.27 billion, and a whopping 209% increase in first-sequence investment, from $77 million to $238 million.

“These biotech increases were significantly more that those achieved by other industries; total VC investment and first-sequence investment for all industries were up only 12% and 24%.”

While funding is up, BayBio will not stop in our efforts to develop programs to connect our community capital. From Pharma Partnering Days to the Entrepreneur and Investor Roundtables, it’s still imperative that we focus on capital access.

Bay Area IPOs
Portola Pharmaceuticals
KaloBios Pharmaceuticals
OncoMed Pharmaceuticals