As many privately held companies choose to remain private longer and defer their initial public offerings (IPOs), these companies are increasingly reliant on raising capital in successive private placements. New categories of investors, including cross-over funds, sovereign wealth funds, and family offices, have become significant participants in latestage (or mezzanine) private placements. Depending on the sector, a late-stage private placement may be an important step for a company. In the technology sector, a latestage private placement may be an IPO alternative and provide growth capital that allows the company to continue to execute on its business strategy. However, in the life sciences sector, by contrast, a late-stage private placement may provide needed capital to allow the company to defer its IPO until there is an IPO window. Also, a late-stage private placement may serve to attract known sector investors to the company and provide important support to take the company through to a successful IPO. Often, the investors will express an interest in participating in a subsequent IPO and this may be important to the IPO's ultimate success. This may be important during periods of volatility and when the IPO market is unpredictable. While life sciences companies represented a significant percentage of IPO issuers in the last few years, and there appear to be improved prospects for IPOs in 2017, there might still be fewer healthcare deals as a percentage of the total number of IPOs.

In this survey, we have examined the late-stage private placements that preceded life sciences IPOs undertaken in 2015 and in 2016. In 2015, there were 61 life sciences IPOs completed. Overall, in 2015, there were 185 IPOs completed. Life science IPOs represented approximately 33% of the IPOs for 2015. In 2016, there were 42 life sciences IPOs completed. Overall, in 2016, there were 117 IPOs completed. Life sciences IPOs represented approximately 36% of the IPOs for 2016.

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