As previously reported, the German pharma heavyweight, backed by Bain and Cinven, is pressing ahead with its IPO plans for next year, raising optimism for the healthcare sector.

In 2024 YTD, healthcare IPOs have reached USD 3.7bn, this is up from USD 2.5bn in 2023.

Volumes this year were boosted by the IPO of Galderma [SIX: GALD] in March; a USD 2.6bn deal.

Galderma’s IPO follows a trend of sponsors tapping the IPO markets for their larger assets deemed too big to sell to other sponsors, a private equity executive previously said. The executive added that even for larger assets it was still worth doing a dual-track process to create some price tension.

The relatively modest volumes this year continue a trend where healthcare IPO volumes have not breached the USD 7bn barrier in the last ten years.

One reason for the relatively low volumes is that the pharma and biotech companies that have typically formed the backbone of listings, especially on the Nasdaq and other growth exchanges, now have increasing access to non-dilutive solutions like royalty financing, said a healthcare lawyer.

These solutions can be a better solution than going public, the lawyer added, as public markets investors now typically look for a marketed product whereas royalties investors can invest at Phase II or earlier.

Rude health

Despite modest volumes this year, overall healthcare ECM volumes reached USD 20.8bn in 2024, the highest level ever recorded, according to Dealogic data, mainly driven by the multiple selldowns in Haleon [LSE:HLN] this year, with the four deals totalling USD 9.1bn.

Overall follow-on volumes in 2024 were USD 16.4bn, up from USD 10.7bn last year.

Healthcare issuers have historically scored big in the follow-on markets, which have accounted for most ECM volumes in the last decade.

Pharma services remain a bright spot investors want exposure to, said an ECM banker.

The 2025 healthcare IPO pipeline remains robust, with several biotech and med-tech companies lining up to list, the banker said.

With Stada poised to lead the charge, the prognosis for next year is looking good.