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Rossiter also noted that half of life science companies in 2013 were able to move from their first stealth filing to an IPO in less than 90 days, a much shorter time than their peers on the high tech side. Being able to move fast and with an accurate bead on what investors want is critical in biotech, where an unexpectedly good batch of data, for example, can suddenly create small windows of opportunity.
But “testing the waters” conversations can only help so much. Biotech veteran Katrine Bosley emphasizes that a private biotech should be building a rapport with public buyers well before IPO plans are in motion, going on what she calls “non-deal” roadshows and making presentations in the private-company tracks of investor conferences (even if, as once happened to Bosley, the only people present are the “audio-visual guy, the junior banker who introduced me, and the CEO waiting to give the next talk”).
Bosley, an Xconomist, was CEO of Avila Therapeutics, which was acquired by Celgene in January 2012. As chairman of Genocea Biosciences (NASDAQ: GNCA), she helped steer the company to an IPO in February, and she said a lot of pre-IPO companies are hungry for information on how best to test the waters.
The frenzy has abated for now; just three life science companies debuted in April (though in many other years that would be an avalanche). But four are getting close, according to Renaissance Capital, with more than a dozen in the public queue. And thanks to confidential filing, no doubt there are a lot more out there testing the waters that we don’t know about yet.