Four biotech companies on track for IPOs this week despite government shutdown
Even with the government still temporarily shut down, this could be the biggest week for biotech IPOs in years.
Government funding expired on Saturday, triggering a partial government shutdown that shuttered agencies deemed not critical to public safety and national security. The list of shut down agencies includes the U.S. Securities and Exchange Commission, which is required to sign off on initial public offering documents before a company can go public.
The shutdown may be brief. House Speaker Mike Johnson, speaking with the media, said he expects the Senate-passed appropriations bill to come up for a vote in the House on Tuesday. But until the government reopens, the SEC's operating plan states that the agency will not process new or pending registration statements.
Across all industries, as many as eight companies are lining up for IPOs this week, according to IPO research firm Renaissance Capital. If all eight companies price their offerings this week, it will be the most active week for IPOs in 2021, Renaissance said. Four on that list are biotech companies: Eikon Therapeutics, Veradermics, AgomAb Therapeutics, Spyglass Pharma. Even if the SEC shuts down, these biotech companies can still go public. Before the shutdown, the agency submitted an effective notice for each measure late Friday. The filing is a statement from the SEC that the registration statement has satisfied all of the agency's legal and regulatory requirements, allowing the company to proceed with an IPO.
While IPO activity in 2025 did not reach the heights many had hoped for, the total number of new listings hit a four-year high, according to Renaissance's 2026 IPO Outlook report. The company counts 202 companies that will go public in 2025, raising $44 billion. The numbers continue an upward trend in IPOs, which has declined since a peak in 2021, when 397 IPOs raised $142.4 billion, the report said.
Renaissance believes stabilizing macroeconomic conditions after tariff volatility in 2025, coupled with cooling inflation and lower interest rates, are among the factors driving IPO activity this year. The company also said that there is a large number of companies waiting to go public, many of which are recent IPO candidates. Renaissance expects there to be 200 to 230 IPOs across various industries this year, raising $40 billion to $60 billion.
Cooley partner Rich Segal said the strong IPO market in 2020 and 2021 was not normal and he did not think activity should be expected to return to those levels. Cooley expects the number of IPOs to gradually increase in 2026. Segal added that there is often IPO activity during the J.P. Morgan Healthcare Conference each January. Aktis Oncology, the first biotech IPO of 2026, debuted on Nasdaq ahead of the conference.
Eikon, Veradermics, SpyGlass and AgomAb all time their registration statement submissions to coincide with the JPM meeting. Last week, the companies updated their filings to provide preliminary financial terms for their planned initial public offerings. Siegel said that at the beginning of the new year, many investors want to see the previous year's financial data. Some companies may further delay their IPO dates so that they can provide this data.
There’s another way to go public during the shutdown. Pursuant to Section 8(a) of the Securities Act, a registration statement becomes effective 20 days after filing. Shashi Khiani, a shareholder in Polsinelli's securities and corporate finance business, noted that most companies don't want to go public in this way, so they make changes to their documents and delay their effectiveness until the company receives notice from the SEC. That's because if a company starts selling stock and the SEC later discovers problems with the prospectus, the company could face regulatory enforcement actions and shareholder lawsuits. Companies seeking to enter the public markets this way may get further along in the SEC's review of prospectuses, Siani said.
“Companies that have now gone through several rounds of negotiations with the SEC, where they have addressed the SEC's comments and had no issues, I think they may be stronger candidates or more likely to use this option,” he explained.
Khiani has always advised clients not to use Rule 8(a) for listings due to the legal risks. But two biotech companies did take advantage of the rule to go public during the 43-day government shutdown last fall: MapLight Therapeutics and Evommune. Cooley advised on the initial public offerings of two biotech companies, although Siegel was not involved in either of them. Generally speaking, Siegel said companies would not use Section 8(a) to go public while the government is open.
“This is an absolute last resort,” he said. “I don't think anyone will do it as a first choice, but if the government continues to be closed, we may continue to see other companies do it. But I think the number will be small. If the government is open and functioning normally, people will do it in the normal way.”
At least one biotech company has joined the public markets during the current government shutdown. Polaryx Therapeutics went public on Monday through a direct listing, in which company insiders sell shares directly to the public, without involving underwriters. Listing this way still requires the SEC to sign a registration statement. The SEC gave Polarx the green light for its application and issued an effective notice before closing last week.
Unlike a traditional IPO, a direct listing does not raise new capital for the company. That means Polarx still needs to find funding for its clinical trial program. Polaryx's lead drug candidate, PLX-200, is expected to enter a Phase 2 study in the first half of this year testing the drug's effectiveness in treating a rare lysosomal storage disease. According to Polarx's prospectus, the company had a cash position of $5.7 million as of the end of the third quarter of 2025. The filing did not provide an estimate of clinical trial costs, but noted that Polyaryx only expects its capital to last until the third quarter of this year.
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