Healthcare Sector is Best Performer in Terms of IPO Returns in 2013

Compared to the other sectors, healthcare was the top performer when it came to returns from initial public offering in 2013.

Of the 54 healthcare firms that went public, the average return was 50.2%. Only nine ended the year below issue price, according to an analysis by Renaissance Capital. [The data is as of Dec. 18.]

The technology sector with 45 deals saw an average return of 41.9% while the consumer sector with 19 IPOs saw average returns of 39.5%

The healthcare sector, driven a boom in biotech companies going public, also showed an impressive performance in the amount of proceeds raised. In fact it replaced technology to take the number three spot having amassed $8.6 billion, behind the financial sectors that raised $10.2 billion, which in turn trailed the energy sector that garned $10.7 billion.

The performance in the healthcare sector is even more eye-popping if contrasted with previous years. In 2012, a dozen IPOs brought in a measly $0.8 billion.

Here is a chart showing the proceeds from 11 sectors dating back to 2009.

2013 wasn’t only a good year for healthcare IPOs. It was also a stellar year for the overall IPO market. In fact, the year saw 222 deals, making it the best IPO year since 2000. Renaissance Capital predicts another “dynamic year” for IPOs in 2014.

While biotech had its year in 2013, the question is whether device firms will have their time in the sun in 2012. The successful Tandem Diabetes IPO has left hopes in the hearts of many, but the reality may be quite different. 

-- By Arundhati Parmar, Senior Editor, MD+DI
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