The initial public offering market has been in a lull as investors continue to wait for Claude developer Anthropic to officially file a S-1 form, with just a handful of companies making their public debuts in recent weeks. But don't tell that to biotech investors.
Five biotechs have gone public this month, and several of them have soared -- including Lycia Therapeutics, which gained 67% on Friday. Lycia, which is developing drugs for autoimmune and inflammatory diseases as well as food allergies, priced its offering at $18, the high end of its range, and sold $314 million in stock in its IPO Friday. Shares closed the session at $30 but at one point, Lycia stock had more than doubled, reaching a peak of $36.49.
Lycia's IPO follows the healthy debut for City Therapeutics, a biotech that is working on drugs to treat degenerative eye condition Stargardt disease and some blood clotting disorders. City, which has partnerships with Bausch + Lomb and Biogen and counts Fidelity as a notable investor, rose nearly 30% on its first day of trading on Oct. 16. The stock has pulled back a bit since then, but is still 15% above its IPO price.
Retension Pharmaceuticals, which is developing drugs to treat high blood pressure, is up 27% since it went public on Oct. 9. In a sign that demand for the IPO was strong, Retension increased the size of the stock sale to 3.8 million shares from an original plan of 3.3 million.
Two other biotechs have made their Wall Street debuts this month, but haven't fared as well. TRex Bio, which is also working on autoimmune and inflammatory diseases, has dropped about 1% since its Oct. 8 IPO. Iambic Therapeutics, despite a 18% gain on its first day of trading on Oct. 15, is now down more than 10% from its IPO price.
Iambic, which is using AI to develop drugs to treat various forms of cancer, is backed by Cathie Wood's ARK Investment Management, Stanley Druckenmiller's Duquesne Family Office and Nvidia.
None of these five companies are profitable. as all are early-stage biotechs. But the fact that they have been able to make it through the IPO window at a time when other companies, such as smart ring maker Oura and Solidigm, the flash memory unit of South Korean AI chip company SK Hynix, have shelved their planned listings, is a promising sign that investors still have an appetite for some start-ups.
"Healthcare remains a bright spot," wrote Bill Smith, CEO and founder of IPO research and investing firm Renaissance Capital in a recent report. To that end, several other biotechs, including Aspen Neuroscience and Bambusa Therapeutics, filed for IPOs this month.
Still, the broader IPO market may remain in hibernation for at least another month. Smith said money companies are preferring to stay on the sideline "as most issuers wait to get past the current volatility, the midterms, and the Anthropic IPO."
A draft of Anthropic's IPO filing shows the company lost more than $80 billion in the first half of 2026, The Wall Street Journal reported. Even though more than $70 billion of that is said to be due to accounting charges, some investors may be reluctant to pay a premium for the company.
Anthropic did not immediately respond to Barron's request for comment.
The weak performance of other recent IPOs, like those of sandwich chain Jersey Mike's Subs and homeowners insurer Orion180, doesn't help, either. But for now, it looks like biotech investors are ignoring the IPO doldrums.
