'Home inspections' for life sciences companies going public before clinical proof-of-concept

For the period from 2010 to 2021, we have observed a phenomenon of life sciences companies conducting Initial Public Offerings (IPOs) without any assets that have demonstrated clinical proof-of-concept (POC). Ideally, this area of investment is targeted by investors with the knowledge and resources to assess the probability of success of such early-stage programs based upon adequately planned and performed due diligence. Our analysis of this trend calls for the establishment of a standardized 'home inspection' procedure that would better inform public equity investors buying into such pre-POC companies about inherent uncertainties that few might be aware of and that even fewer would be equipped to assess.