What is the process called for private biotech companies to become publicly traded?

The process for private biotech companies to become publicly traded is known as an Initial Public Offering (IPO). During an IPO, a private company offers shares of its stock to the public for the first time, allowing it to raise capital from public investors. This transition serves several purposes, including increasing the company's financial resources for growth, enhancing its visibility in the market, and providing liquidity for its existing shareholders.

Going public through an IPO involves a comprehensive preparation process, including regulatory filings with entities like the Securities and Exchange Commission (SEC), valuation of the company, and often, an underwriting process where investment banks help determine the initial share price and manage the sale of shares. This process is critical because it establishes the company as a publicly traded entity, subject to public disclosure requirements and regulatory scrutiny, thereby enhancing its credibility.

In contrast, a merger refers to the combination of two companies to form a new entity, while an acquisition involves one company purchasing another. A public announcement could occur before an IPO, but it does not encompass the financial processes and implications of becoming publicly traded.