The healthcare IPO drought is about to break as the sector ‘significantly outperforms’, says the ASX

• A senior ASX listings exec says there’s a hidden pipeline of life sciences IPO candidates that should become more evident by the end of the year
• Ausbiotech Invest delegates also hear about an active slate of private fundraising and a flurry of clinical activity
• A leading clinical services organisation urges the industry to adopt ‘scary’ AI

The Australian Securities Exchange (ASX) says the almost-empty healthcare IPO pipeline is about to fill, with life sciences companies accounting for about 20% of listing queries to the bourse.

Meanwhile, tech companies are nowhere to be seen.

The uptick of interest reflects the sector’s strong outperformance relative to the broader market, ASX listing executive Blair Harrison told yesterday’s Ausbiotech Invest seminar in Melbourne.

“Clearly it has outperformed and clearly it is a sector that investors are valuing and applying good multiples to,” he said.

He said the ASX holds weekly meetings to review upcoming listing proposals.

“We get about five of those applications every week and generally there’s been at least one life sciences company in those five,” he said.

“You will see more coming through towards the end of this calendar year.”

On the ASX’s numbers, 164 healthcare companies are ASX-listed, about one quarter of which are classed as biotechs.

Sixteen stocks are classed as ‘unicorns’, with market valuations of $1 billion or more.

Overall, the sector is valued at $345 billion.

Take out CSL’s (ASX:CSL) circa $100 billion worth and that still accounts for a decent slab of the overall bourse.

No “froth” but solid recovery

Harrison said capital raisings were recovering from the “frothy” conditions of 2021, when the sector raised $8 billion in IPOs and follow-on whip-’rounds.

That was an extraordinary year at the height of the pandemic.

In the June half of 2025, the tally stood at just about $2 billion – about the same as the total for all of 2024.

“Public markets are unparalleled when it comes to accessing capital, not only in terms of the volume of capital, but the speed at which it can be accessed,” Harrison said.

As for prospective IPOs, Harrison did not name names.

The ‘end of year’ timeline  sounds a tad too short given next month’s ‘race that stops the nation’ is a signal for industry to down tools until about next February.

But life sciences companies reportedly girding for an IPO include pain treatment house Saluda Medical and the Cochlear (ASX:COH) backed Epiminder, which is developing a scalp implant to monitor epilepsy.

At yesterday’s event, the private inflammatory disease specialist Filamon confirmed it expected to seek a listing in the first half of 2026.

Harrison said a private fundraising might take six to 12 months to complete.

“On public markets you can do it a week and raise vast amounts of capital,” he said.

“Not all of those companies are success stories, but the capital is coming to the sector in vast amounts.”

Dreamers need not apply

Not that ASX listings are a ‘one size fits all’ proposition.

Harrison said companies frequently pitched for a listing, based on a mere concept or idea.

“Sometimes they are really good but there’s not much to it,” he said.

“In order to succeed, it has to be more than a brilliant idea with a bunch of people around it.

“There needs to be a clear path to commercialisation and a clear plan as to how those funds will be used.

“If there are any gaps in development, we need to see an explanation as to why.”

A super way to close the funding gap?

A founding partner of specialist biotech investor Brandon Capital, Dr Chris Nave said the fundraising climate remained “difficult.”

But “there’s probably more capital now available in our sector for early-stage investment than there has ever been”.

He said the sector needed to nut out a “model and structure” to unlock these funds.

“We won’t do it overnight,” he said.

“We have done it with early stage [funding].

“Our job now is to solve that later stage where you need to raise $100 million to $200 million.”

An obvious source of funding is the trillions of superannuation dollars.

Nave said while super funds were keen to invest in biotech, the life sciences sector needed to derive smarter structures to enable them to do so.

Adopt AI – carefully

Meanwhile, a leading US-based global contract research organisation has urged clinical trial custodians to embrace AI to enable smarter design.

IQVIA Biotech’s Australian-born president Meg Hooton said adopting tech such as AI was “challenging and not a straightforward path”.

That’s especially the case as regulators are still coming to grips with the implications.

But “healthcare grade” AI already is being used to optimise trial protocols and reduce the inherent risks.

“Data analytics also is being used to identify where the patients are and which sites are most likely to enrol those patients and prevent screening failures,” Hooton said.

“We are also using AI for faster recruitment.”

As with other industries, the sector needed to approach AI with care.

“There are a lot of issues with ‘hallucinations’, fictious references and privacy issues.”

Hooton said AI also exhibited “inbuilt bias” befitting any humanoid.

“It always takes a very optimistic view; it never comes back to you and says ‘it ain’t going to work’.”

AI aside, Hooton said biotechs had adopted “smarter” clinical strategies as they strived to do more with less.

These include adaptive trial design, which allows study sponsors to adjust their studies based on early data.

“We are not afraid to cut underperforming sites,” Hooton said.

“Traditionally site selection was ‘set and forget’. These days we are a bit more scrupulous about who we continue on the trial.”

Minnows on the verge of greatness

Ausbiotech Invest was a forum for 23 private and ASX-listed biotechs to pitch their yarn in eight succinct minutes (with one-on-one investor contact also available).

Remarkably, most of them kept to that strict limit without the need for a rising orchestra, Oscars style.

One clear message is that despite the challenged conditions, private exponents are on a capital raising spree.

Oncology drug developer MLS Bio is on the hunt for (US$25 million in a US based raising).

Other presenting companies passing the hat include wrinkle buster Humble Bee Bio ($4 million), infectious diseases house Iso Biotech (up to $10 million), bovine vaccine developer Tiba Biotech ($US10 million) and type 2 diabetes drug developer Myopharm ($3.5 million).

Sleep on this one

Other presenters are on the verge of clinical trial breakthroughs.

Avecho (ASX:AVE) CEO Dr Paul Gavin said his company was well advanced in a phase III trial of its cannabinoid (CBD) based candidate for insomnia, which afflicts 10-30% of the population.

If approved, the drug would be the only sleep-inducing CBD candidate approved globally.

“It will be a monster,” he said.

The company hopes to complete the study in the 2026-27 year, with an approval submission to the local Therapeutic Goods Administration (TGA) the following year

The TGA allows registered oral CBD medicines to be sold over the counter, “offering a major commercial advantage over traditional prescription drugs.”

Meanwhile, Blinklab (ASX:BB1) chairman Brian Leedman couldn’t spill the beans on results from the company’s 450-patient autism detection trial, due out this morning.

Blinklab shares are on trading halt.

But he more than hinted at a beautiful set of numbers, which would pave the way for a 1000-patient trial pitched at US Food & Drug Administration approval.

“I’m grinning from ear to ear,” he said.

Stockhead sponsored Ausbiotech Invest 2025 but this piece was written independently.