Summary List Placement
In an unpredictable year for capital markets, it’s a good time to be a life-sciences lawyer.
IPOs ground to a halt nine months ago before a flurry of public offerings this summer were followed by blockbuster IPOs such as Airbnb and DoorDash in the last few weeks of 2020. Many legal experts say they are optimistic the current momentum will carry into 2021, but others are more skeptical and wonder when investor enthusiasm will wane.
Last week, videogame company Roblox and buy now, pay later fintech Affirm delayed their highly anticipated IPOs, the former’s decision based on price dynamics and concerns about big first-day pops.
In comparison, life-sciences lawyers — who represent emerging biotechnology companies and help them navigate legal and policy issues as they bring their products to market — found more stability in their work and in the capital markets throughout the year.
“When the pandemic started, using March as a proxy, we were really not sure what was going to happen on many levels, but from a capital markets perspective, we really didn’t miss a beat,” said Mitchell Bloom, who co-heads Goodwin Procter’s life sciences practice. He noted that since 2015, fundraising for biotech has been pretty open, and that trend continued in 2020.
“Deals that were in the queue, stayed in the queue, and new people continued to get organized for new transactions,” he said.
116 biotech IPOs completed so far in 2020 raised $22 billion, according to data from Crunchbase, which is up from 103 deals that raised $8.3 billion in all of 2019. Currently, biotech public offerings account for a quarter of all IPO money raised this year.
Recent public offerings in the space include gene-therapy company 4D Molecular Therapeutics, which raised $193.2 million, and AbCellera Biologics Inc, a Canadian biotech company developing antibody-based therapies that raised $482 million in their IPOs.
These deals can generate large fees for the lawyers involved: the three companies budgeted $1.9 million, $1.9 million, and $4.5 million, respectively, to pay their legal teams at Latham & Watkins, Troutman Pepper Hamilton Sanders, Goodwin, and Blake Cassels & Graydon.
Those numbers are according to the companies’ IPO paperwork, and the final number the law firms see could look different.
Yasin Keshvargar, a partner at Davis Polk & Wardwell, said that 2020 brought more capital markets opportunities for biotech companies working on coronavirus therapies and vaccines.
“When COVID hit, most of the IPO market shut down,” he said. “But there were some bright spots in that, and one of them was healthcare.”
Lawyers who spoke with Business Insider said that as the year wore on, the coronavirus impacted capital markets less and less as investor demand stabilized and companies adjusted to doing deals differently. Heading into 2021, Keshvargar and Bloom said they expected work to continue to flow in the life sciences space, even after
“The market has performed in odd ways during the whole pandemic. I’m not sure if the highs and lows were to be expected, specifically the highs,” Bloom said. “There weren’t a lot of companies that were COVID-driven, but there was a pull in the market for new companies and an appreciation that the life sciences industry would help get us out of this.
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