Globally, IPOs across all sectors nosedived last year after a blockbuster 2021, as aggressive interest rate hikes by central banks to curb inflation put an end to the era of cheap money. In the biotech sector, there were only 47 IPOs last year that raised a total of about $4 billion, compared with 152 offerings in 2021 that had raised over $25 billion. While the XBI is still trading 50% below its February 2021 closing high, analysts believe the downturn in biotech has bottomed out. All we need is one or two biotech IPOs to get good interest and the floodgates will open." Reuters GraphicsThe second half of 2023 is more likely to see a significant step-up in biotech IPOs instead of the first half, as markets await further clarity on potential rate cuts, analysts said.

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