Determinants of IPO Valuation in the KOSDAQ Biopharmaceutical Sector: The Role of New Drug Pipelines

This study examined trends in R&D maturity among biopharmaceutical companies at the time of their Initial Public Offering (IPO) and investigated the impact of R&D pipelines on firm value. We analyzed 66 new drug development companies listed on KOSDAQ from January 27, 2005, to June 3, 2025, using the Value-Search database and prospectuses disclosed on the Data Analysis, Retrieval and Transfer system (DART). The results indicate that the proportion of companies with a lead pipeline that has entered Phase 2 clinical trial at the time of IPO has increased. Pipeline characteristics emerged as key drivers of IPO value. Specifically, both advancement to Phase 3 clinical trials and oncology drugs were found to have a significant positive effect on firm value. Furthermore, the Pipeline Score—a comprehensive indicator assessing not only quantitative aspects but also the success rates and sustainability of R&D—also positively influenced valuation. These findings provide investors with an indicator of firm valuation and suggest that establishing a robust pipeline portfolio is as crucial as advancing the lead pipeline for companies preparing for an IPO.