BioPharma

NYSE changes fee schedule in bid to woo biotech companies

Starting on Saturday, the exchange is instituting a discount on its annual listing fee for pre-revenue companies, capping it at $100,000 per year over three years. While the policy applies across industries, it is an effort to draw biotech companies that would usually list on the Nasdaq.

When biotechnology companies that don’t yet have products on the market look to go public in order to boost their ability to raise money for drug development and commercialization efforts, they typically go to the Nasdaq. But lately, some other markets have been trying to attract them as well, and the latest is the one most associated with big, blue-chip companies.

Effective Saturday, the New York Stock Exchange will adopt a discounted annual fee schedule for companies that generate little to no revenue, as long as their global market capitalization is at least $200 million and meets other listing requirements, according to a regulatory filing. While the new rule would apply to companies regardless of sector, it is aimed in particular at those in the life sciences space. “These companies are typically engaged in research and development (in many cases they are biotechnology companies focused on developing new drug candidates) or are in the early stages of commercialization of a product,” a regulatory filing read.

“We are providing an improved on-ramp for biotech companies looking to access the public markets and receive the benefits of an NYSE listing, while preserving capital to invest in their businesses,” NYSE COO John Tuttle wrote in an emailed statement.

The new rule applies to pre-revenue companies, meaning those that have recorded no more than $5 million in revenue either in the most recent fiscal year or during the year of listing through the most recent quarter. For those companies, annual listing fees will be discounted by 75 percent and capped at $25,000 per quarter for three years.

It’s not the first time a stock market has changed its rules to try and court small biotech companies. Last year, Hong Kong’s stock exchange changed its rules to allow biotech companies to list there. Still, while the exchange had seen six initial public offerings thanks to the change, The Wall Street Journal reported in March that the effort had failed to produce a flood of companies listing there. The first biotech company to list on the exchange before turning a profit, Hangzhou, China-based Ascletis Pharma, saw its stock fall more than 15 percent only days after its initial profit offering, the South China Morning Post reported last August.

Some biotech companies have nevertheless listed on the New York Stock Exchange before launching products, such as Arcus Biosciences and Biohaven Pharmaceuticals.

Photo: Spencer Platt, Getty Images

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