IPOs: Europe’s Public Markets Problem

For biotech companies, the IPO is like a debutante ball—a grand public coming-out party where you hope to dazzle investors with your scientific brilliance and unshakable potential. In Europe, however, this glittering spectacle often ends up feeling like a poorly attended cocktail party where guests are reluctant to take the hors d’oeuvres, let alone bet on your future. Meanwhile, across the Atlantic, the NASDAQ hosts a high-energy carnival of biotech offerings, complete with deep-pocketed investors ready to take the plunge on the next moonshot.

Why is it that Europe’s public markets seem so allergic to biotech risk? And is the problem fixable, or should founders simply pack their bags for New York?

The European IPO Scene: A Tough Crowd

Let’s set the stage. European biotech IPOs have been struggling, and the data is as clear as it is grim:

• In 2022, the number of IPOs in Europe halved, with proceeds dropping by a staggering 76% compared to 2021, landing at just €14.6 billion ($16.6 billion).
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• Things improved slightly in 2023, with 57 IPOs raising €14.6 billion ($16.6 billion)—better than 2022 but still far below pre-pandemic peaks.
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• Meanwhile, NASDAQ’s biotech IPOs alone raised nearly €7 billion ($8 billion) in 2023, underscoring the stark transatlantic divide.
  (Source)

In the UK, the picture is downright bleak. After a blockbuster 2021, where biotech IPOs raised £1.3 billion ($1.7 billion), the market collapsed in 2022, generating a paltry £29 million ($37 million). By 2023, the IPO party was canceled entirely—there wasn’t a single biotech listing.

Why Does Europe Struggle?

1. Investors Who Prefer Their Comfort Zones

European institutional investors, bless them, have a soft spot for things they can wrap their heads around—think blue-chip stocks, stable returns, and anything that doesn’t scream “clinical trial failure risk.” Contrast that with NASDAQ investors, who are practically born with a taste for risk, ready to bet on unproven pipelines in exchange for outsized rewards.

2. Bureaucratic Hurdles Galore

Europe is many wonderful things—home to breathtaking art, fine wine, and enviable healthcare systems—but fast and easy regulation? Not so much. The region’s fragmented markets and detailed regulatory frameworks are great for investor protection but less suited to the fast-and-loose volatility of biotech.

3. Fragmented Markets

Instead of one dominant exchange, Europe has several competing venues—London, Paris, Amsterdam—each vying for listings. While variety might be the spice of life, it doesn’t create the deep liquidity or global visibility that a single powerhouse like NASDAQ can offer.

Case Studies: Europe vs. NASDAQ

Oxford Nanopore: A Missed Opportunity?

When Oxford Nanopore went public in 2021 on the London Stock Exchange, it raised £524 million ($670 million). Not bad, right? But the stock’s post-IPO performance has been underwhelming, and critics have wondered aloud whether a NASDAQ listing might have unlocked more value by attracting biotech-savvy investors with bigger wallets.
BioNTech: The NASDAQ Advantage

Germany’s BioNTech took the opposite approach, opting for a NASDAQ listing in 2019. The company raised $150 million and, thanks to its subsequent COVID-19 vaccine success, became a stock market darling. Many believe its choice to list in the U.S. played a pivotal role in its meteoric rise.

The Numbers That Tell the Story

The gap is glaring. NASDAQ’s higher proceeds and superior post-IPO performance point to an investor base that’s better equipped—and more willing—to back risky biotech ventures.

Conclusion: Europe’s Uphill Battle

So where does this leave European biotech founders? The reality is sobering. Europe’s public markets, while accessible, lack the depth and risk tolerance to truly value biotech innovation. For many, the promise of NASDAQ—with its global reach, deep liquidity, and investor base steeped in biotech knowledge—is too good to pass up.

But crossing the Atlantic isn’t a silver bullet. U.S. listings come with their own costs—hefty regulatory requirements, intense scrutiny, and the challenge of competing in a crowded market. For some, Europe might remain the best option, warts and all. For others, NASDAQ offers the brighter, if riskier, path.

Whichever road founders choose, the key is to tread carefully, eyes wide open. And maybe keep some champagne on ice for when the IPO celebration finally feels deserved.