By Niket Nishant
(Reuters) -Three healthcare startups are looking to raise up to $400 million in their U.S. initial public offerings, underscoring the sector's strong rebound in 2024 after a two-year slump.
September was the busiest month for healthcare IPOs this year, Dealogic data showed. Strong debuts by companies such as BioAge Labs and Bicara Therapeutics have also encouraged listings among other IPO candidates.
Meanwhile, startups are looking to take advantage of the early stages of a potential interest rate-cutting cycle by the Federal Reserve, even though the uncertainty around the U.S. presidential election next month is likely to keep a lid on funding activity toward the end of the year.
"(Biotechs) may want to capture the current market momentum rather than waiting for elections or economic indicators," said Zara Muradali, national managing principal of Grant Thornton's life sciences industry practice.
"As private equity and venture capital firms seek exits for their investments, there may be pressure on biotech companies to list sooner rather than later."
Upstream Bio, developing treatments for some respiratory disorders, is aiming for up to $212.5 million. Kaiser Permanente-backed CAMP4 Therapeutics, working on therapies for a range of genetic diseases, is seeking $80 million.
CeriBell is targeting up to $107.2 million. The company makes monitors to detect neurological conditions and is backed by TPG's The Rise Fund.
"A company with a product that's in a clinical trial is mature and it likely took a significant round of private capital in order to get there. Those will try to tap the market," said Ross Carmel, partner at securities law firm Sichenzia Ross Ference Carmel.
While the IPO market has recovered from the lows of last year, investors continue to support companies with an established business model and a clearer path to profitability.
Upstream is evaluating its chief product in a mid-stage trial, while CAMP4's therapy is being assessed in an early-stage trial. Both have not generated any revenue from sales. CeriBell already fetches revenue.
All of them will list on the Nasdaq, with Upstream trading under the symbol "UPB", CAMP4 under "CAMP" and CeriBell using "CBLL".