Tech stocks are continuing to soar in the U.S. market, with hardware, digital services and an ever-growing influx of new users pushing the industry to new heights. While Amazon, Apple and others may be getting the most attention, biotech companies that are focusing on treatments and vaccines for COVID-19 are also exploding in value.
According to data from Dealogic collected by the Wall Street Journal, the total value of U.S.-listed biotech IPOs has risen to nearly $10 billion as of Aug. 7. While that’s a far cry from the trillion-dollar valuations of Big Tech, it’s an enormous increase over the last two decades. The previous high set in 2018 was at just $4 billion.
The data signals an abundance of biotech companies eager to dive into the public trading space. Biotech traders are constantly on the edge of their seat waiting for news on the development of a COVID-19 vaccine or treatment plan, and the biotech industry is using this as an opportunity to gather quick, massive amounts of funding. According to Dealogic, the average first-day performance of a new biotech IPO in 2020 is a healthy 34 percent – a feat not seen in the industry since 2000.
Overall, biotech companies are dominating the IPO scene in the U.S. Both new and experienced biotech traders are struggling to keep up with fluctuating stock prices based on tidbits of COVID-19 news and press releases. Some investors are avoiding biotech IPOs altogether for fear of the market being over-saturated with companies still in the very early stages of development.