Declining Health

If you’ve been reading the Ipreo Blog for any time at all, you probably know we have a complicated relationship with the Healthcare sector. And by “complicated” we mean “we write about it all the time.”

It’s not our fault! Since the Blog was launched in 2014, the Healthcare sector has dominated the IPO market. When 2014 broke IPO records, Healthcare was a major beneficiary. We couldn’t help but cover that surge, and in so doing we explored some reasons for it. Things have calmed down all around since then, but healthcare has still dominated – in terms of the amount of deals, if not always the amount of proceeds generated by said deals.

We’ve hit a major turning point. For the first time since the Ipreo Blog has been around, Healthcare might not be the story. Based on the first quarter’s activity, 2017 may well be the first year – since 2012! – that Healthcare has not emerged as the leader in deal count and/or proceeds. Right now, based on the first three months of the year, Tech IPOs are expected to take the top spot in terms of proceeds while Energy IPOs are expected to lead in deal count.

2017’s biggest IPO thus far was early March’s Snap Inc. debut from the tech sector, which currently has four IPOs for the year. The hefty price tag launched Snap to the top of the proceeds board, almost $3B ahead of the REIT sector’s total (all from the year’s lone REIT IPO), and one behind Energy’s five IPOs in terms of deal count.

As quarter one winds to a close, Healthcare has seen just three debuts, for a mere $284.4M. That’s half of 2016’s first quarter output, which itself was the fewest deals the sector had seen since 2013, and is a far cry from 2015’s 14 Q1 debuts and 2014’s 30. Additionally, there is just one Healthcare IPO in the 6-month backlog, from Tocagen, which looks to raise $86.3M in proceeds. Last year at this time, the sector had 9 Healthcare IPOs in the pipeline.

After years of robust diagnoses, it looks like the Ipreo Blog’s most celebrated sector is finally coming down with something. Hopefully Healthcare won’t be under the weather for long.