IP and IPOs: what stock markets expect

IP proved vital for Marinomed’s €22m flotation on the Vienna Stock Exchange, report Christian Hackl at TUM-Tech and Thomas Bereuter at the EPO

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Christian Hackl and Thomas Bereuter

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In 14 years, the Austrian biopharmaceutical company Marinomed Biotech AG  has evolved from a spin-off from the Veterinary University of Vienna to a public company, raising €22 million through an initial public offering (IPO) in February 2019. Since then, its shares have performed positively, remaining consistently above the issue price. IP is understood to be key for biotech companies, especially if technology transfer is part of the business case. When going public, IP becomes even more critical. Investors have to rely on the information provided in the sales prospectus. That’s why investment banks with the help of commissioned external professionals conduct a meticulous IP due diligence during the IPO preparation phase. It includes an assessment of the quantity and quality of the IP assets owned or licensed to the company. It often also takes into account how IP is captured and protected. For the IPO, all company claims based on its IP base must be validated. The investment bank can only move forward in preparing the IPO based on a positive IP due diligence. For the IPO, Marinomed published a sales prospectus that gave potential investors a thorough insight into the company and its business. The IP topic formed a central part. Some of the institutional investors approached Marinomed with additional, highly specific and qualified questions on its IP portfolio. IP is so vital for an IPO because investors mainly invest in the future potential of a company. Their decision is less based on current financial figures. To come to fruition, this future potential depends on a solid IP base to maintain a competitive advantage. That’s why IP is almost prerequisite for an IPO in biotech. As Dr Andreas Grassauer, chief executive of Marinomed, puts it: ‘investors don’t buy a share of Marinomed because of our revenue today but because of our potential for future growth. If you do your own R&D, you always have to keep the IP in mind from the beginning. If you are successful with the R&D of your product, you want to earn money with your technology. The only way to do that in a sustainable way is to fend off competitors with a strong and solid IP base.’ ▪ Christian Hackl is managing director of TUM-Tech GmbH and Thomas Bereuter is innovation programme support manager at the European Patent Academy of the EPO. The full version of their article on IP for investors appears in ‘Winning with IP: Managing high-growth intellectual property’, Novaro Publishing, January 2021. More details here. (Any opinions expressed in this article are those of the authors and not necessarily those of their respective organizations.)