The Great Economic Crisis of 2008 has cast a pall over public offerings in general, but in health care it’s been surreal. There have been 3 measly new stock offerings the whole year and that includes pharmaceutical, biotech and medical device companies combined.
And the ones that made it, MAKO Surgical Corp., CardioNet Inc, and Bioheart, Inc., went forward in QI. There hasn’t been a single health-care IPO since March.
“It’s very troubling,” says Steve Brozak, a medical devices and biotech expert and the president of WBB Securities LLC. “These companies are like the farm team for large pharmaceutical makers to buy novel technology and drug discoveries,” he added in the Wall Street Journal.
The famine represents a reversal of fortune for the sector which outpaced all others between 2004 and 2006 and finished second to tech offerings in 2007, according to Renaissance Capital’s IPOHome.com.
But the spigot did not close as suddenly is it appears. In the 6 months before MAKO went public in February, 13 health care deals were yanked before the big day. Twenty-four have been withdrawn since.
Maurice R. Ferré, MAKO’s CEO believes his company succeeded in part because its IPO made it out just before the roof collapsed. “We faced a huge amount of headwind going into the deal,” he told the Journal.
No doubt they did, but it’s a Cat 5 hurricane out there now.