Crossover Evolution:

Authors:

Geoff Meyerson, CEO & Co-Founder

Brian Coleman, Global Head of Capital Markets

Callie Fry, Associate, Capital Markets

Amanda Schoewe, Analyst

The Covid-19 pandemic was the biggest biopharma news of 2020. It may be hard to remember now, but in March of last year, biotech indices had quickly nose-dived, along with the broader market, as the reality of the pandemic became apparent. The prevailing financial sentiment was doom and gloom. That was temporary. Biotech had a record-setting performance for the remainder of the year, when it led the bull market to record highs and unprecedented fundraising. Crossover financing rounds were a leading trend in that recovery.

Crossover rounds are traditionally defined as venture financings in which there is significant participation from investors that typically buy into publicly traded companies or IPOs, usually within the 12 months prior to their IPO.  

• How can a biopharma contemplating a crossover round optimize the process?  
• Do crossover rounds typically presage successful IPOs?  
• How much do they boost IPO success, and share appreciation in the public markets?  
• What are the characteristics of the best crossover rounds?  

What was formerly a relatively uncommon strategy is now viewed as almost de rigueur prior to a biopharma IPO. For biopharmas to structure optimum crossover rounds, they need to know which factors drive performance of the financing itself, and in turn, the performance of the company’s subsequent IPO and shares price in the market.

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