NYSE’s Commitment to Biotech
Why we are creating a new on-ramp to the public markets
Biotechnology ranks as one of the most exciting sectors in the economy, with thousands of companies working to solve some of the most intractable problems ever faced. Killer diseases like cancer sit squarely in their sights. Their success offers hope to millions.
One major challenge these companies face is capital, raising the money needed to fund the research and clinical trials that can bring their therapies to market. The ability to help these biotech companies literally change the world fits well within the mission of the New York Stock Exchange. That’s why we recently launched a new initiative focused on supporting biotech companies. We’re offering them a new on-ramp to access the capital markets.
Why is this important? The needs of biotechnology companies are unique. These are companies purpose-built for one thing: to develop life-changing drugs and move them through the clinical trial process to approval, when they can be commercialized and offered to the patients who so desperately need them.
Yet, this process is costly. Capital becomes paramount. Unlike other startups, biotech companies have little need for marketing spend. They have no mass manufacturing or distribution costs (yet). Their organizations are generally small, with limited complexity.
Looking at their needs, we came to the conclusion that these companies could benefit greatly from listing on the NYSE, with the ability to both raise needed funds and become part of our massive network of healthcare companies, including industry giants like Abbott Laboratories, Eli Lilly, Johnson & Johnson and Merck, that might someday become partners to these young organizations. However, we would have to do this in a way that prioritized their ability to preserve capital.
The solution was simple. We have changed our rules to sharply reduce listing fees for companies with annual revenue of less than $5 million during their first 3 years with us. This lets young biotechs take full advantage of an NYSE listing during the period when they are heads down in the lab. They can focus on drug development, while we assure their shares trade more smoothly than on any other venue, particularly during periods of market volatility.
This NYSE biotech program underscores the type of innovation we routinely bring to bear for companies on the path to listing. It is not the first. A little more than 10 years ago, we began the process of modernizing our listing standards to make it easier for companies that are not yet profitable to list on the NYSE.
Since that time, major technology listings have virtually exploded on our exchange. Over the past 5 years, we have raised 75% of all U.S. listing proceeds for tech companies. NYSE-listed technology providers include household names like Uber, Pinterest, Alibaba, Twitter, Salesforce and Square.
Our intention is to do for biotech companies what we have done for technology. Every biotech company we list on the NYSE is a step toward curing the incurable, helping those with little hope, and partnering with those who have the courage to tackle humanity’s most stubborn diseases.
The NYSE’s commitment to biotechnology is absolute. Stay tuned. There’s more to come.
We are Living Tech. Click here to learn more about our biotech offerings.
