These four companies, which are about to be listed on the US stock market, are worth focusing on. They may reverse the decline of Biotech IPOs.

After a series of unremarkable mergers and "broken IPOs", one of the most closely watched industries in the capital market - biotechnology, is about to see four companies make their debut on the US stock market through IPOs. These biotech companies are expected to price their IPO stocks in the coming weeks, and investors will closely watch to see if they can reignite the excitement of this industry going public. Data compiled by institutions show that this year, the majority of innovative drug developers in the US IPO market raising over $10 million have seen their stock prices struggle, with 6 out of 11 companies trading below their IPO prices, with a median decline of 45% below the IPO price. Well-known biotech companies like BioAge Labs Inc. and MBX Biosciences Inc. will seek to work with top industry bankers and legal teams to reverse the downward trend in pricing of biotech companies going public. Some bankers suggest that the market's response to the next batch of biotech companies will indicate whether other companies in the industry will be able to go public later this year or in early 2025 with investor confidence. Seo Salimi, Co-Head of Equity Capital Markets at Paul Hastings LLP, said, "For biotech companies seeking to go public on the US stock market in 2021 or 2025, the stable or significant upward trend in the stock prices of these four biotech companies planning to go public in September will have a noticeable positive impact." For companies like Bicara Therapeutics Inc. and Zenas Biopharma Inc., which have already shown concept validation data - indicating that their drugs may have significant success in later-stage clinical trials - a strong first-day performance in their IPOs will show that the market's interest in investing in early-stage drug developers is increasing. Additionally, for BioAge, it will also test market interest in investing in early-stage biotech companies focused on weight loss drugs. The dual risks surrounding the development of innovative drugs make the biotech industry a very volatile investment field. During market turbulence, versatile investors often quickly sell biotech stocks that require years of development before they can be sold as treatments. It is understood that with the unprecedented monetary policy stimulus from the US Federal Reserve in 2020 and 2021, liquidity in the market has been extremely abundant, leading to biotech companies raising approximately $46.5 billion in the past two years, even surpassing the sum of the previous eight years - a development that has surprised many non-professionals. The nature of prosperity or downturn in this industry, along with current macroeconomic and geopolitical risks, could potentially plunge the entire US IPO market into chaos, with these four pending biotech company IPOs under close scrutiny. Biotech IPO returns remain lackluster after a period of prosperity - versatile investors were shocked when they first appeared in 2020 and 2021 Data compiled by institutions shows that as of September 3, biotech companies in the industry have raised approximately $2 billion through IPOs this year, a 24% increase from the same period last year, although nearly two-thirds of the revenue was raised during the first two months of the industry's IPO boom. The data shows that in the following six months, the overall proportion of Biotech industry IPO gains in the US stock market has dropped significantly from 17% in February to 6.5%, raising funds of less than $800 million. Most new biotech startups have shown mediocre performance, a key factor leading to a significant decrease in the number of biotech companies going public, and the IPO of Alumis Inc. has faced serious challenges, with its trading price remaining below the IPO price, causing potential Biotech companies planning to go public to feel very anxious. The Nasdaq Biotech Index has risen by about 9.6% this year, thanks to the strong performance of large pharmaceutical companies like Regeneron Pharmaceuticals Inc. and Alnylam Pharmaceuticals Inc., with new biotech companies going public raising an average of over $10 million, seeing little change in stock prices and actual operations compared to their initial public offering. However, more disturbingly, four new listed companies have basically declared the end of their journey on the first day of listing. The Federal Reserve is expected to begin cutting interest rates within two weeks, which may further attract investors to focus on higher-risk biotech investment opportunities. Although lower interest rates take time to enter balance sheets, a strong performance in the market after a successful stock market debut will be crucial for private biotech companies seeking to go public in the next five months. The prospect of increased investor appetite for risk and a series of Federal Reserve interest rate cuts in September could pave the way for a strong market acceptance of the biotech companies to end the year with the DRIVE they need before the real Biotech IPO boom kicks off in 2025. "Biotech may shine in the fourth quarter of this year, and we have a very good product pipeline." said Louis Lehot, a partner at Foley & Lardner. "Investors in the biotech industry IPOs have come successively and are ready to invest larger amounts of money." The recent boost in small-cap stock valuations due to expectations of a Fed rate cut could see these four biotech IPO companies kick off one of the year's peak periods. Successful listings betting on a 100 basis point rate cut by the end of the year could boost trading prices for these new stocks. However, if the US economy overheats, and labor market conditions...The power market is resilient, and the Federal Reserve may refuse to cut rates by 50 basis points in September, instead choosing to cut rates by 25 basis points at each meeting for the rest of the year. This means there is a possibility of a 75 basis point rate cut this year instead of 100 basis points. Therefore, investors need to closely monitor economic data such as nonfarm payrolls, CPI, and core PCE that influence Federal Reserve policy decisions.If the Federal Reserve is about to cut interest rates and the US economy is resilient enough to avoid a recession, then the stock market is very likely to rotate towards small and mid-cap stocks that have been severely hit since 2022, excluding the seven major tech giants. These stocks are theoretically very sensitive to interest rate expectations, and even a small rate cut could boost their prices. With the Federal Reserve expected to start cutting rates, the performance of small and mid-cap stocks may outperform the seven major tech giants in the US. This is mainly because small and mid-cap stocks are often very sensitive to the benchmark interest rates set by the Federal Reserve. They rely heavily on floating rate loans, so a rate cut would reduce their long-standing debt pressure and potentially increase profit margins. Against the backdrop of the Federal Reserve's expected rate cuts this year, the classic rotation rally of small and mid-cap stocks or the trend of profit recovery in small and mid-cap stocks may become evident, driving funds towards small and mid-cap stocks that benefit from rate cuts and have very low prices, rather than the tech giants whose valuations are at historical highs. Investors will become, in a general sense, "comparative shoppers", comparing and selecting among different options.