IPO step-ups becoming rare

It is becoming increasingly common to reset a company’s valuation at its IPO. Only one of the six (17%) U.S. biopharma IPOs this year came with a step-up in valuation, versus 11 out 18 (61%) in 2024. Over the full period from 1Q24-3Q25, nearly half of the IPOs did not involve a step-up.

An analysis of the 24 biotech IPOs on U.S. exchanges since the start of 2024 shows that 11 had pre-money IPO valuations that were either flat or below that of their last private financing round. And five of those 11 had already taken a down or flat round in their last private financing, demonstrating the lengths companies needed to go to align their valuations with public market investor expectations...