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Median prices for life sciences (green) and technology (gold)  IPOs (source: Fenwick & West)
Median prices for life sciences (green) and technology (gold) IPOs (source: Fenwick & West)

It’s been quite a year so far for IPOs in the Seattle area. Alder BioPharmaceuticals, Immune Design and Trupanion have all gone public since the start of this year, with none of them posting earth-shattering results.

wallstreet-shutterstock_92699377That’s roughly in line with national trends in the tech and life sciences industries, according to a new report on IPOs released today by Fenwick & West. Forty four percent of the life sciences companies that completed their IPO by the end of June ended up pricing their shares below the estimated pricing range they provided, compared to 15 percent of technology companies.

Similarly, almost 60 percent of the technology companies that went public during that period raised more than $100 million, compared to 18.2 percent of life sciences companies. The message is clear: life sciences companies face a very different market than their tech counterparts.

Bothell-based Alder priced its offering at $10 a share, below its initial range of $13 to $15 a share, raising $80 million. Immune Design, which wasn’t included in Fenwick’s survey because it went public in July, priced at $12 a share – the bottom of its range – and raised $60 million.

Percent change of share prices surrounding lock-up during the first half of 2014 (Source: Fenwick & West)
Percent change of share prices surrounding lock-up during the first half of 2014 (Source: Fenwick & West)

Looking towards the future, things aren’t all promising for tech firms. Fenwick’s report found that tech companies were on average more likely to trade down around the time of their lockup expiring, compared to their biotech counterparts.

Both sectors have been affected by a softer overall stock market, though. The median first day closing price for a tech IPO in the second half of 2013 was $19.13, compared to $16.50 in the first half of 2014. The life sciences sector was hit harder, with the median closing price on the first day hitting $13.65, down from $19.26 in the second half of 2013.

Fenwick partner Dan Winnike said in a press release that he didn’t see the current market climate as cause for concern, citing deals in the law firm’s pipeline.

“We are optimistic that the second half of the year will remain strong, despite current market turbulence,” he said.

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