After a few gloomy years, biotech IPOs rebound in 2026. A new record for the sector most cash raised by a biotech in an IPO was set in April only to be broken weeks later. So far, 13 life sciences companies have gone public this year – 17 if you include tools and diagnostics companies in the total.
Alongside IPOs, there has been a surge in merger and acquisition activity. Ernst & Young has about $132 billion in M&A deals so far this year. There are some common themes in this wave of deals, said Rich Ramko, partner at EY. The first is that almost all of these transactions involved companies with assets in late-stage development. Many of the new public biotechs created this year are led by management teams that have already taken companies public. Additionally, companies with platform technologies are more successful when they launch their IPOs.
There have been 13 sizable IPOs in the biotech sector so far in 2026. Ramko said he thinks it’s possible for the sector to have as many or more in the second half of this year. But an open IPO window doesn’t mean a return to the gogo days of 2021 and 2022. During a session Tuesday at the BIO Convention in San Diego, Ramko moderated a panel discussing what companies need to think about before going public. Here are some highlights:
What’s the one thing biotechs must have before an IPO?
In a word, investors, said Sharon Tetlow, managing partner of Portrero Hill Advisors. The biotechnology sector is different from almost every other industry. Retail investors follow in the footsteps of specialist investors, and biotechnology investments and IPOs are led by specialists. These investors studied the company, its management team and met with the company several times before meetings with institutional investors, Tetlow said. These are also the investors who will continue to support a company through its first follow-on investment as a public company.
“Even if the final union is formed at the very last moment, it is the result of a very long process.”
How to find investors
Dan Angius, Nasdaq’s senior managing director of new listings and capital markets, said a good way to find potential investors is to look at 13F regulatory filings, which publicly traded companies submit to the Securities and Exchange Commission to show their large institutional investors. Angius said biotechs should review the records of comparable companies.
Angius warned that the process of identifying investors could take longer than many biotech companies expect. Finding investors is about building relationships. Before the Covid-19 pandemic, companies could expect to hold around 30 to 40 investor meetings. Today, the average is 90 to 95. This means businesses need to start early to get more opportunities. The relationship with the investor is important.
“When you’re in a meeting with an investor for the first time, small talk counts as long as you do it authentically,” Angius said.
Sam Zucker, a partner in Goodwin’s life sciences group, said identifying investors and developing relationships starts with a biotech’s Series A or B round. After a funding round, a company could have informal conversations with its investors to see who would actually support an IPO. Most clients overestimate the support of their existing investor syndicate, Zucker said. Knowing who would back an IPO is important because in most biotech IPOs, most of the capital comes from existing investors. Zucker said certain strategic conversations can lead to acquisitions. Over the past year, many of the large M&A deals occurred because the parties did not want to wait for the capital markets to support an IPO.
Details, preparation and planning
Ramko said it’s important for a biotech company to hire the right CFO. A first-time CEO who has never taken a company public before will want a CFO with more Wall Street experience. The right CFO can help the CEO through the process.
Levine said a biotech company can anticipate it will take about a year to prepare to go public if it has already been audited. Otherwise, businesses should expect to need more time – so do the audit. Additionally, issues such as acquisitions will affect the timing of an IPO. The consolidated results of this transaction will need to be taken into account before the company can go public. Taking a company public is a lot of work, Levine said. But ensuring a company can stay public and meet the regulatory requirements to stay public requires a lot of preparation.
Keep your options open
Many companies take a dual approach in which preparations for an IPO occur alongside discussions about an M&A transaction. But Levine noted there were more than two leads. Companies can pursue collaborations as another option. There are also several options for going public. SPAC mergers and reverse mergers remain options. Angius said it’s important that both companies involved in a merger deal are on the same page. A biotech that wants to merge with a shell company also active in life sciences will speak the same language, whereas a business combination with a company in another sector becomes more delicate.
A merger agreement can also result in an acquisition. As an example, Angius cited Candid Therapeutics, a clinical-stage developer of T-cell activators for autoimmune diseases. In March, Candid reached agreement to go public via reverse merger with Rallybio. Information made public by Candid as part of the reverse merger agreement set a floor price. Before the conclusion of the deal, UCB presented a $2 billion offer to buy the company..
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