Biotech and pharmaceutical firms are increasingly turning to initial public offerings (IPOs) to raise capital. From 2001 to 2023, these industries accounted for approximately 24% of all IPOs. This figure rose significantly to 35% from 2019 to 2023, indicating that biotech and pharma IPOs are gaining traction in the market.

Investing in these stocks can be a double-edged sword, as they can yield substantial gains or devastating losses. Most biotech companies have little to no revenue and their stock prices often hinge on the outcomes of clinical trials. Positive trial results can lead to soaring share prices, while negative outcomes can result in sharp declines. Below, I will highlight three biotech stocks that went public in 2024 and have performed impressively, along with the factors contributing to their success.

CG Oncology Soars Nearly 100% in Just Two Days

CG Oncology (NASDAQ: CGON) launched its IPO on January 24. This stock exemplifies the volatility seen in biotech markets. Initially priced at $19 per share, robust institutional demand quickly drove the price to $29 before retail investors had a chance to engage. By the close on January 25, shares reached over $37, marking a remarkable 96% rise in just two days. Despite a reported flat performance in 2024, the stock is effectively up 95% from its IPO.

The company’s main drug candidate, CG0070, targets non-muscle invasive bladder cancer (NMIBC) and is currently undergoing two Phase 3 FDA trials alongside one Phase 2 trial. In May, stock prices surged after the company reported “class-leading” trial responses compared to other approved treatments. Market analysts project a 73% upside based on the current average price target, with results from one trial expected by year-end.

Arrivent BioPharma Targets FDA Approval After Success in China

Arrivent BioPharma (NASDAQ: AVBP) held its IPO on January 25. The stock has climbed 78% from its IPO price, though it’s noted as up about 57% by market data; a trend similar to that of CG Oncology. Arrivent’s key medication is firmonertinib, developed for treating non-small cell lung cancer, currently in one Phase 3 trial and two Phase 1 trials.

Notably, firmonertinib has already gained approval in China for a variant of the condition it’s targeting in the U.S., earning approximately $624 million there since 2021. However, Arrivent has not profited from this revenue, as its partner, Allist, holds commercial rights. Should they secure U.S. approval, Arrivent will obtain those rights. The data from their Phase 3 trial is anticipated for release in 2025.

Analysts are slightly less optimistic about Arrivent, with an average price target suggesting only a 20% upside. This conservative outlook may stem from competition with Johnson & Johnson’s (NYSE: JNJ) FDA-approved drug RYBREVANT, which also addresses the same indication Arrivent is investigating.

Upstream Bio Aims to Revolutionize Asthma Treatment

Upstream Bio (NASDAQ: UPB) debuted on October 10, with shares rising 49% largely thanks to pre-retail trading activities. The company’s flagship drug, UPB-101, is currently in three Phase 2 trials targeting severe asthma, chronic rhinosinusitis with nasal polyps (CRSwNP), and chronic obstructive pulmonary disease (COPD). Data for asthma and CRSwNP is expected to be released in the latter half of 2026 and 2025, respectively.

While treatments for these conditions already exist, Upstream asserts that its approach targets the underlying causes more effectively than current therapies. This novel strategy aims to significantly reduce inflammation related to these diseases. Since it recently went public, analysts have not yet provided price targets for Upstream Bio.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.