At the start of what many healthcare attorneys hope will be a busy year, public biotechs are raising cash, signaling a thawing public market and potentially fertile ground for IPOs.

Last Wednesday, biotechs Erasca Inc., Corvus Pharmaceuticals, and BioAge Labs announced they were raising money to further their research and development.

Public biotechs are raising cash, signaling a thawing public market and potentially fertile ground for IPOs. Direct offerings, where public companies sell shares directly to specific investors, are also gaining steam. (iStock.com/jittawit.21) Stuart Falber, co-chair of the life sciences group at WilmerHale, said that follow-on rounds, when a public company issues additional shares to raise capital, are a "general reflection of a better financing environment" for the space.

"If there's money there, then more likely there's money for IPOs too, for the right type of company," he said.

Erasca, which is developing tumor treatments, and Corvus, a drugmaker focused on immune diseases and cancer, both closed upsized rounds, raising $460 million between them by week's end.

Metabolic disease-focused BioAge said it would aim to raise $115 million from investors.

While a smattering of public fundraises doesn't directly translate into a wide-open IPO window, it does signal that investors are open to spending money on quality businesses.

Mitch Bloom, global chair of Goodwin's life sciences practice, calls follow-ons a "necessary condition" for IPOs to happen, rather than a driver of the IPO market.

They signal that "there's investor appetite and they're interested in good stories," he said.

Last month between Dec. 9 and 10, biotechs saw a record-setting 24 hours for follow-on offerings. Eight companies raised $3.2 billion, according to an analysis by Endpoints News.

Direct offerings, where public companies sell shares directly to specific investors, are also gaining steam.

Biotechs Ocugen Inc. and Foghorn Therapeutics Inc. both announced such fundraises this month from investors including RTW Investments, BVF Partners, Deerfield Management, and Flagship Pioneering.

Charlie Kim, co-chair of Cooley's global capital markets practice group, told Law360 that he puts registered direct offerings, public offerings, and private investment in public equity deals all in the same bucket.

"There's different reasons why companies choose one structure over the other, but the big picture is they're all public company raises," Kim said. "Whether you're raising it from a couple insiders, whether you are doing it in a big public offering, whatever the case may be, I would kind of conceptualize those as being one category in different forms."

The small boom in public fundraises reflects a growing air of optimism that's emerged as the life sciences space has seen industry index XBI climb around 38% over the past year. Lower interest rates and cooling inflation levels are also contributing to a favorable climate for companies.

At the J.P. Morgan Healthcare Conference this month, the bellwether event of the healthcare industry, attorneys told Law360 that while IPOs aren't fully back, there's a definite ramp-up happening behind the scenes. A slew of companies have filed confidential paperwork to go public in recent weeks, they said.

Wesley Holmes, managing partner of Latham & Watkins LLP's Boston office and a capital markets partner, said he's seeing a much busier "shadow pipeline" on his desk right now than last year.

His desk at the end of 2025 was filled with confidential submissions, he said, some of which could hit the public markets in the first quarter of this year.

Cooley's Kim also said that he has a number of clients looking toward the spring as a potential go-public opportunity.

"I'm on a bunch of offerings that are preparing to [go public] in whatever window that's coming up," he said.

"We're all hopeful that those IPOs go well" because that will encourage more companies to follow suit, Kim said.

But in the backdrop is the potential of a looming government shutdown, and the fear that a geopolitical shift could dampen investor sentiment. Attorneys said that there's still reason to be cautious.

"The flip side, the challenge, is it doesn't take a lot sometimes to derail that market," Goodwin's Bloom said. "People have to feel good about the market for these types of deals."