The mostly dormant biotech initial public offering market is beginning to stir back to life, prompting a wave of behind-the-scenes activity among venture capital firms, institutional investors, and capital markets lawyers as companies quietly prepare to go public.

According to one New York capital markets attorney, the most visible signs of the rebound are not yet appearing in public filings. Rather, they are emerging through a surge in negotiations over lock-up agreements and registration rights tied to confidential biotech IPO submissions.

“We are seeing a noticeable increase in general market questions from private equity funds and other institutional shareholders around lockups and registration rights in anticipation of potential biotech IPOs,” the attorney said. “Especially in venture capital and private equity firms that invest heavily in biotech. There’s been an uptick in activity.”

In the first four months of 2026, there have been 15 biomedical listings in North America, generating roughly USD 3.76bn in deal value, according to Dealogic. That’s up significantly from the same period last year, when there were 12 listings, reflecting just USD 794m in deal value. This year’s IPO deal volume is the second most on record for the period going back more than 20 years.

Many more offerings remain in the confidential submission phase with the Securities and Exchange Commission, meaning public investors may not see the filings until later this quarter or in the second half of the year.

Still, legal and banking activity suggests a growing IPO pipeline is taking shape.

Early lockups become the new normal

One of the most significant shifts emerging in biotech IPOs is the timing of lock-up agreements.

Traditionally, lockups begin at IPO pricing and restrict insiders and major shareholders from selling stock for roughly 180 days after the offering. Increasingly, however, biotech issuers are asking investors to sign those agreements months earlier. “In biotech, lockups are being signed pre-IPO, meaning they’re effective earlier,” the attorney said.

Law firms are increasingly circulating lock-up agreements at or before the public filing of registration statements and, in some cases, during the confidential submission process itself. That practice can effectively extend investor restrictions by an additional three to six months beyond the standard post‑pricing lockup period.

The shift in strategy follows a legal dispute last year in which Deerfield Management alleged that Swiss eye care group Alcon obstructed Aurion Biotech’s IPO on the New York Stock Exchange in an effort to buy it at a discount. Deerfield and Alcon both invested in Aurion’s Series C round in 2022.

Deerfield, which owned roughly a third of Aurion at the time it filed suit, said Alcon accumulated enough shares to disrupt the offering process one month after the biotech company submitted its S‑1 in January 2025. Alcon purchased the additional stock, giving it a majority of the voting shares, from fellow investor Petrichor Opportunities Fund before lock-up agreements were in place.

Alcon acquired Aurion in March 2025. The price was not disclosed.

“That episode made the industry more cautious,” the attorney said. “Biotech investors are now more willing to sign lockups earlier to prevent similar situations.”

When lockups do expire, investors are taking action. Follow-on transactions — when shareholders can sell down their positions — have seen the best start on record with 147 deals worth USD 20.2bn compared to 103 raises worth USD 6.2bn in 2025. This year’s follow-on volume has surpassed the previous record in 2021, when there were 146 deals that totaled USD 18.3bn for the same period.

IPO window reopens after multi-year slowdown

The renewed focus on biotech IPO mechanics comes as broader equity capital markets activity begins to recover after several years of subdued issuance.

“There’s definitely more market activity now,” the attorney said. “The last three years were slow, but things are picking up. The floodgates are starting to open.”

The recovery is especially pronounced in biotech, where improving aftermarket performance, scientific breakthroughs, and continued pharmaceutical acquisition activity are helping restore investor confidence.

After a surge in biotech M&A in 2025, activity has remained robust this year, highlighted by transactions such as Sun Pharmaceutical’s USD 11.75bn acquisition of Organon and Eli Lilly’s USD 7.8bn takeover of Centessa Pharmaceuticals.

Matthew Kennedy, a fund strategist at Renaissance Capital, said the IPO resurgence has been somewhat surprising given the uneven performance of biotech listings earlier this year.

“There have been some initial mixed returns from the biotechs this year so far,” he said.

While shares of some newly listed public companies like Veradermics and Maplight Therapeutics have surged, others have generated more muted returns, leaving investors cautious about whether the recovery would gain traction.

The strategist said focusing solely on biotech indexes misses the deeper drivers of renewed investor appetite.

“The ‘why’ might be scientific advancements in the clinic, the success of certain drugs or areas such as obesity and GLP-1s, and acquisitions from large pharma,” Kennedy said.

Meanwhile, large pharmaceutical companies facing looming patent expirations continue to acquire smaller biotech firms to replenish drug pipelines, reinforcing the perception that IPO candidates could become future takeover targets.

In November, for example, Pfizer paid USD 10bn for Metsera, which was about 10 months after the obesity drug developer listed its shares on the Nasdaq.

“The more acquisitions you see, the more investors think maybe an IPO could become a good takeout candidate,” the strategist added.

Venture funding keeps pipeline intact

Unlike prior biotech downturns, venture capital funding into private life sciences companies remained relatively resilient even as public IPO issuance slowed sharply over the last several years.

That dynamic has created a substantial backlog of venture-backed companies that are just beginning to test the market.

Avalyn Pharma, Alamar Biosciences, Hemab Therapeutics, Odyssey Therapeutics, and Seaport Therapeutics are among those that completed upsized IPOs recently.

In April, obesity drug developer Kailera Therapeutics raised USD 625m in its offering, ranking as one of the largest biotech IPOs ever.

“The biotech pipeline still remains deep because venture funding has held up much better than IPO issuance over the past few years,” Kennedy said. “Like every other sector, the below-average IPO activity we’ve seen over the last few years has built up a pipeline.”

Daniel Klausner, ECM managing director at Houlihan Lokey, said investor demand is also broadening beyond traditional drug developers into adjacent healthcare sectors including medical technology and medical devices.

Investor willingness to support smaller issuers is another notable shift. The adviser said some recent offerings would have struggled to gain traction in earlier market environments.

“That, to me, says there’s a lot of risk-on,” Klausner said.

Dual-track strategies and flexible capital raising

Companies exploring IPOs are also increasingly pursuing dual-track strategies, maintaining both IPO and M&A options simultaneously.

Larger issuers are evaluating public offerings while remaining open to acquisition bids, while smaller biotech companies continue to attract interest from strategic buyers seeking promising clinical assets.

At the same time, companies are experimenting with alternative financing structures should market conditions shift.

Some issuers use IPO preparations to attract investors into late-stage private funding rounds and ultimately delay or abandon public listings if capital needs are met privately.

Others pursue confidentially marketed public offerings, or CMPOs, before pivoting to negotiated private offerings involving a small number of institutional investors if demand falls short.

“Capital that was stagnant is now moving again,” another advisor said.

Regulatory climate adds tailwinds

Market participants also see a potentially more accommodative regulatory environment contributing to the improving sentiment.

Legal advisors point to expectations of lighter SEC reporting requirements as part of a broader deregulatory trend. While they noted perceptions of less-stringent FDA scrutiny, they caution that staffing limitations may be contributing as much as policy changes.

Most companies currently preparing for IPOs are US-based, though European and Latin American issuers are also active. Asian participation, particularly from Chinese companies, remains more subdued amid geopolitical tensions and regulatory concerns.

For now, market participants expect the next visible wave of biotech IPO activity to emerge in the coming months as confidential submissions convert into public filings and roadshows begin.

“We should start seeing more filings and roadshows around mid-May,” the attorney said.