Volatile markets in August take a toll on US life sciences IPOs, says Burrill

Market volatility in August battered life sciences companies that went public this year, wiping away nearly $1.3 billion in market capitalization as tumultuous trading activity hit them harder than the broader market, IPOs in general, and biotech stocks as a whole, a Burrill & Co analysis shows.

The market’s gyrations, triggered by the USA’s debt ceiling fight, worries about the nation’s creditworthiness, the debt crisis in Europe, and the stalled economic recovery, threw US life sciences IPOs into a dramatic reversal. As a group, the return from the 13 US life sciences IPOs completed in 2011 on US markets had moved into negative territory by the end of August, down an average 7.4% from their IPO price compared to the 17.2% gain they had realized by the end of July. The group in August fell 18.9%, with three advancers and 10 decliners compared to nine advancers and four decliners at the end of July.

…but sector still outperformed