On Oct. 23, Lycia Therapeutics made its Nasdaq debut and finished its first trading day up 66.7% from its IPO price. Two weeks earlier, Retension Pharmaceuticals had arrived on the same exchange to a different reception: Its shares fell 12.3% on their first day, according to S&P Global Market Intelligence.
Both companies raised money to develop experimental medicines. Both chose Nasdaq over other avenues like the New York Stock Exchange. Investors, however, responded very differently.
That common destination is no coincidence. Of 531 U.S. biotech and pharmaceutical IPOs included in a FactSet-based analysis covering 2015 through 2024, 515 — or 97% — listed on Nasdaq, according to investor relations firm New Street.
With biotech IPOs rebounding in 2026, the relationship looks intact. But the uneven reception for new listings raises a question: What does choosing Nasdaq actually buy a drug developer?
How a preference became the default
Nasdaq began trading in 1971 as an electronic market and became associated with technology and growth-oriented companies. Biotechs, which can need years of financing before selling a drug, fit into that world.
The exchange launched its Nasdaq Biotechnology Index in November 1993, creating a benchmark for eligible drugmakers trading on its market.
But the industry’s attachment may be as much about habit as infrastructure. Laurence Watts, New Street Investor Relations’ CEO and founder, argues that Nasdaq’s early association with technology probably started a pattern that reinforced itself as more biotech companies followed their peers.
Watts contends that U.S. investors, analysts and bankers generally don’t distinguish between the two major exchanges — Nasdaq and NYSE — when evaluating biotech stocks. Asked by executives where to list, he wrote in August 2025: “In practice, it doesn’t matter … but in reality ‘everyone’ lists on Nasdaq.”
That’s an industry adviser’s assessment, not proof that the venues are interchangeable. But Nasdaq has a different argument for why the listing decision matters.
What Nasdaq can show
In an October analysis, Nasdaq economists Phil Mackintosh and Nicole Torskiy examined companies that transferred their primary listings to the exchange.
They found that average bid-ask spreads — the gap between quoted buying and selling prices — narrowed 3% in the 90 days after a switch compared with the 90 days before. Shares available at the best quoted prices increased 13%.
Those are meaningful trading measures, particularly for investors buying and selling sizable positions. But the findings come from Nasdaq itself and cover listing switches across industries. They do not isolate biotech IPOs and can’t establish that a drug developer would receive a higher valuation or raise more money simply by choosing Nasdaq over the NYSE.
The competing explanations are not mutually exclusive. Nasdaq may have trading advantages while also benefiting from an industry that has overwhelmingly chosen it for decades.
The IPO comeback puts investors to the test
The question has fresh relevance. J.P. Morgan counted 22 biopharma IPOs raising $7.5 billion through September 2026 this year, more than in any full year from 2022 through 2025. Separately, S&P Global reported seven U.S. healthcare IPOs raising $1.2 billion in October. The figures cover different sets of issuers, but both point to renewed activity after several lean years.
Lycia and Retension put a human-scale edge on those numbers, even if their first-day returns can’t fully explain why investors favored one offering over another. Lycia is developing protein-degrading drugs, including candidates in early clinical testing for allergic and autoimmune disease.
Retension is advancing an experimental treatment for uncontrolled and resistant hypertension. The companies differ in financing size, clinical programs and their proposition to investors.
These distinctions matter in different ways to different investors. In PharmaVoice’s September examination of eight prospective biotech IPOs, Nasdaq healthcare listings chief Jordan Saxe emphasized clinical evidence and a strong investor base as being key to winning financial backing for a company.
Sofinnova Investments managing partner Dr. Jim Healy stressed building the analyst following and investor support a company needs after going public. Andrew Lam, a managing director at Ally Bridge Group, put the market’s priorities more bluntly: “They are investing in real drugs and not science projects.”
All of which is to say, an IPO is another funding round, not a verdict on whether a medicine will work. The exchange provides a place to trade shares. The company still has to explain what its next clinical milestone will cost and why investors should finance it.
And Nasdaq continues to be the prime venue where biotech companies make their case.
A challenge beyond Wall Street
Other markets are cultivating their own biotech ecosystems. Hong Kong introduced Chapter 18A in 2018 to admit qualifying pre-revenue biotech companies. By April 2026, 86 companies had listed through the framework, raising more than $17.8 billion, according to Hong Kong Exchanges and Clearing.
Those figures do not show U.S. biotechs abandoning Nasdaq; Hong Kong serves a different mix of companies and investors. But they show how exchange rules can create another pathway to public capital.
Politics are complicating that picture. In October, the U.S. Treasury proposed restrictions on certain American investments in Chinese biotech businesses. As PharmaVoice reported this week, the proposal has raised questions about U.S.-backed companies built around drugs licensed from China.
That’s not a finalized ban on licensing deals, or a rule deciding which stock exchange a company can use. But the financing structures that produce future IPO candidates may face new constraints.
For most U.S. biotechs, the exchange choice has nearly been made before the roadshow begins. Lycia and Retension reached the same destination and left their first trading days with very different results.
Nasdaq may have won the contest to become the industry’s default address. But the harder test for the companies listing there could be whether investors will keep paying for the science.
