Biotechnology company leaders who recently guided their firms through initial public offerings shared critical insights about the
challenging journey during a panel at the BIO CEO conference. The executives emphasized that going public requires extensive
preparation, strategic timing, and a compelling narrative to attract investors in today’s demanding market environment.
Jeffrey Finer, CEO of Septerna, which raised $288 million in its October IPO, described the process as extremely rigorous. The San Francisco-based company began laying groundwork in late 2023 with a comprehensive financial audit before selecting banking partners roughly four and a half months prior to the offering.
Similarly, Upstream Bio’s CEO Rand Sutherland, who secured $255 million through his company’s IPO, highlighted the importance of assembling the right team and crafting a clear investment story. Upstream met with approximately 120 potential investors, emphasizing its drug candidate verekitug’s advantages in treating conditions like asthma and COPD.
The executives stressed that timing plays a crucial role. Advisers typically recommend companies go public between the initiation of human trials and 6-12 months before major data releases. Legal experts suggest beginning preparations about a year ahead, reviewing existing agreements and ensuring compliance with SEC regulations.
Building the right banking syndicate proved essential. Companies often chose four to five banks with complementary strengths and existing relationships. The selection process focused on finding partners with strong analysts, experienced bankers, and robust equity capital markets capabilities.
Daniel Schmitt, CEO of Actuate Therapeutics, which completed a $22 million IPO in August, emphasized maintaining relationships with trusted advisers who understand the company’s history. This
familiarity helped streamline document preparation and other technical requirements.
Price determination emerged as another critical factor. Companies conducted extensive “testing the water” meetings with potential investors to gauge interest levels and appropriate share price ranges. Septerna ultimately priced above its initial range at $18 per share, while carefully managing the balance between existing and new investors.
The transition to public company status brought significant
operational changes. Executives noted stricter communication requirements and the need to manage relationships with a broader investor base. Finer described having to limit previously routine discussions with early investors to ensure fair disclosure to all stakeholders.
The biotech IPO market has shown signs of recovery, with 24 offerings completed last year, marking an increase from previous years. However, challenges persist – most biotechs that went public in 2024 currently trade below their offering prices.
Legal counsel Gabriela Morales-Rivera emphasized the importance of establishing clear narratives and meeting exchange listing
requirements, particularly regarding board composition. She noted that market volatility remains a significant concern, requiring companies to build robust investor relations and human resources capabilities to manage various stakeholder interests.
The executives’ experiences underscore the complex nature of taking biotechnology companies public. Success requires extensive advance planning, strategic team building, careful timing, and effective storytelling to attract and retain investors. While the IPO market shows signs of improvement, companies must still navigate numerous challenges to successfully transition from private to public status.