Biotech's Velvet Rope: Only the Biggest Names Got Into Q1's IPO Party

Aktis Oncology opened the year's IPO window on January 9, raising $318 million (upsized from roughly $210 million). Aktis builds targeted radiopharmaceuticals: tiny guided missiles that deliver alpha-emitting radiation directly to tumors while leaving healthy tissue alone. Its lead program targets Nectin-4, the same protein that Pfizer's blockbuster Padcev goes after, but with a radioactive twist. Eli Lilly was so enthusiastic it bought $100 million worth of shares at the IPO and had previously signed a collaboration deal worth $1.1 billion.

The Velvet Rope Is Real

Notice a pattern? Every company that successfully IPO'd had three things in common: clinical-stage data, massive prior venture funding, and programs in red-hot therapeutic areas like oncology and immunology.

No preclinical company has gone public since 2024. Let that sink in. If your drug hasn't been tested in humans yet, the public market doesn't want to hear about it. Back in 2021, investors were basically buying lottery tickets. A lot of those tickets turned out to be worthless (many 2021 IPOs are down 60-80% from their debut), and the hangover has reshaped how Wall Street evaluates biotech risk.

Ben Zercher, a senior analyst at PitchBook, put it this way: "Product-focused companies built around clinically grounded programs are forming the backbone of the window, while larger platform-oriented issuers are testing how far investor appetite can extend beyond near-term validation."

Translation: show me the data or stay home.

Even the Winners Aren't Winning (Yet)

Before you assume everything is rosy for the companies that made it through, there's a catch. Several of Q1's biggest IPOs are already trading below their offering prices. Generate Biomedicines closed its first day of trading at $12.65, down about 21% from its $16 IPO price, giving it a market cap of about $1.6 billion. Eikon has faced similar headwinds.

This creates an awkward dynamic. Investors are willing to write enormous checks to get these companies public, but then the stocks drift downward once they start trading. It's like paying full price for a concert ticket and then watching the band play to a half-empty arena.

Part of the explanation is macro. Geopolitical tensions, FDA leadership changes, and broader market volatility have made the first quarter choppy for everyone.

What Happens to Everyone Else?

For the dozens of private biotechs sitting on the sidelines, the path forward looks narrow. The IPO window isn't really "open" in any traditional sense; it's more like a doggy door that only Great Danes can fit through.

Jonathan Norris, managing director at HSBC Innovation Banking, noted that optimism for a broader rebound has been "tempered by macro factors and FDA volatility." The IPO numbers simply haven't spiked the way people hoped.

Sofinnova Partners' Antoine Papiernik offered a sliver of hope, suggesting that as markets strengthen, smaller or earlier-stage offerings may eventually emerge. Analysts forecast 25 to 30 biotech IPOs for the full year. But even that optimistic scenario keeps the market far below the approximately 99 deals of the 2021 peak.

For smaller biotechs, M&A is increasingly the more realistic exit. Why fight through a hostile IPO market when a pharma giant with a patent cliff might pay a premium to acquire you outright?

The Bottom Line

Q1 2026 proved that the biotech IPO market is alive, just extremely selective. The companies that can raise $300 million or more are doing fine. Everyone else is pressing their nose against the glass.

This is a market that rewards maturity, partnerships, and clinical proof over promise and potential. If you're a biotech CEO eyeing the public markets, the message from Q1 is loud and clear: come with data, come with cash, or don't come at all.

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