There’s no denying the IPO window is pretty narrow for venture-backed companies, especially for those in life sciences. Of the five VC-backed IPOs last quarter (which, by the way, was the most VC-backed offerings since Q1 2008) none were in the life sciences field.
But that’s not a bad thing, says Mark Brooks, managing director of Scale Venture Partners. The Foster City, Calif.-based firm last year had one of the better IPOs in recent memory when portfolio company IPC Inc., a provider of information management systems to hospitals and physician groups, went public at $16 a share. IPC (Nasdaq: IPCM) closed today at $26.45 a share.
Brooks is not lamenting the lack of IPOs. He says that what he’s seeing is a lot more VC-backed companies in phase III stage, raising money from their syndicate of investors instead of going IPO.
“When the IPO market comes back for life sciences, the companies will be a lot more advanced, and will plenty of phase III data to show,” Brooks says.
Until, the IPOs come back, Brooks says that VCs will have to bring their companies a lot further along than they used to.
One example of that might be Oraya Therapeutics, which earlier this week announced that it raised a $42 million Series C round form Scale, Domain Associates, Essex Woodlands Health Ventures and Synergy Life Partners. The round brings the company’s total VC raised to more than $62 million, Brooks says.
Oraya will use the latest round of cash to expand its clinical trials for its radiation treatment of wet age-related macular degeneration, a common cause of blindness.
“And we have reserves for future rounds,” Brooks says.