DOGE makes its way into biotech IPO filings
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DOGE cuts are leading to new warnings in filings from biotech and health-care companies looking to IPO stateside.
The big picture: Uncertainty is a deal killer.
- According to data from Renaissance Capital, there have been just four biotech IPOs this year that have raised over $50 million — down from 10 in the same period last year. Venture bets are slowing too.
Driving the news: Carlsmed, a personalized spine surgery company backed by B Capital Group and U.S. Venture Partners warned in its prospectus that "the current U.S. presidential administration" has issued policies to cut headcount and budgets in agencies including the FDA.
- "It remains unclear the degree to which these efforts may limit or otherwise adversely affect the FDA's ability to conduct routine activities," it continued.
- Sixth Street-backed cancer diagnostics company, Caris Life Sciences, which went public in late June, said this:
- "The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS, and related agencies," Caris' prospectus read. "These actions ... may propose policy changes that create additional uncertainty for our business.
Zoom out: Though Carlsmed says it's "unclear the degree to which" the cuts will affect the FDA's ability to conduct routine activity, those in the space already feel the effects.
- The FDA told KalVista Pharmaceuticals last month that the agency would miss a deadline in approving a drug for potentially life-threatening genetic disorders — marking what appears to be the first time a review had to be extended over DOGE cuts.
- Verve Therapeutics, in a filing explaining its rationale for selling to Eli Lilly for $1.3 billion, noted that Peter Marks resignation in March as director of the FDA played a role in its move to sell rather than raise additional capital.
The bottom line: These things take time to shake out. Meaning the current slowdown likely won't just gum up dealmaking now — it'll also gum up the IPO and later-stage pipeline down the road.
