Biotech IPOs Under Chapter 18A: Five Years of Outcomes

Five years after the introduction of Chapter 18A, the biotech IPO class of 2019-2021 provides sufficient data to assess outcomes. As of mid-2025, approximately 60 companies have listed under Chapter 18A, of which roughly one-third have subsequently graduated from ‘B’ (pre-revenue) to ‘normal’ listing status by meeting the revenue or profit thresholds. The median post-IPO share price decline from offer price for Chapter 18A companies is approximately 45%, reflecting the sector-wide biotech selloff of 2022-2023, as well as the inherent risk of pre-revenue drug development. However, companies that achieved regulatory approval for a lead drug candidate within two years of listing have outperformed those that did not by a factor of approximately 3x. The data supports a bifurcated thesis: Chapter 18A has successfully channeled capital to companies that subsequently achieved commercial milestones, but has also allowed companies with weak pipelines to access public markets at valuations that proved unsupportable. The exchange has responded by tightening listing requirements for pre-revenue biotech applicants.