July 2, 2025

Do Biotechs Need a CFO to IPO?

The question posed in the title follows from three well-known truths:

1. Chief Financing Officers (CFOs) are expensive (generally second only to the CEO in most biotechs), typically receiving not only a high salary, but also a substantial grant of equity.
2. As typically non-revenue generating entities, a biotech’s finances – and hence finance departments – are usually not that complex at IPO.
3. The size and complexity of most biotechs usually only grow once a company’s IPO proceeds are put to use.

Certainly, there have been times in the stock market’s boom years since 2009, when all a biotech needed was a Vice President of Finance (or similar) at the time of IPO, and a vague promise to put a CFO in place within the first 6-12 months of being public.

So, does a biotech need a CFO to go public?

For people in other industries or healthcare verticals, the thought of listing a company without a CFO is likely dizzying. Not so in biotech where investors’ focus is on the viability of drugs within a company’s development pipeline.

In fact, think about any IPO roadshow you’ve witnessed and recall how a CFO’s speaking role is usually reserved for a solitary finance slide at the end of the presentation (in addition to Q&A).

The major speaking roles on an IPO roadshow typically go to the CEO (who is sometimes also a founder) and the CMO or CSO (depending on the composition of the C-suite and status of the company’s development pipeline).

Let’s look at the data.

In order to answer the question “Does a Biotech Need a CFO to IPO?” we looked at successful biotech and pharma IPOs from 2022-2024 that raised at least $50 million. From their S-1 filings (specifically the management biographies section) we ascertained whether or not they had a CFO in place at IPO.

CFO status at time of IPO for 2022-24 biotech/pharma IPOs (n=38).

Source: S-1 filings

From the chart above, you can see that a supermajority 34/38 (89%) of biotechs had a permanent CFO at the time of listing.

Moreover, a further 3/38 (8%) had an interim CFO in place.

In fact, only one biotech, Lexeo Therapeutics, had neither a permanent nor interim CFO in place when it went public.

So, while the data shows that you can IPO without a CFO, your biotech would be part of a 3% minority (based on recent history) should you choose to do so.

How soon did biotechs without a permanent CFO put one in place?

Biotech	IPO Date	CFO Status at IPO	Time from IPO to Permanent CFO	Evolution of CFO Status
Septerna	24-Oct-2024	Interim CFO	75 days	Ran Xiao named interim CFO 10/24. Gil Labrucherie appointed CFO 1/6/25.
Arcellx	04-Feb-2022	Interim CFO	108 days	Lance Thibault was interim CFO 1/22 – 5/22. Michelle Gibson appointed CFO 5/23/22.
Lexeo Therapeutics	02-Nov-2023	No CFO	413 days	Kyle Rasbach, appointed CFO 12/18/24.
Prime Medicine	20-Oct-2022	Interim CFO	454 days	Carman Alenson was interim CFO until 1/24. Allan Reine, appointed CFO 1/17/24.

Source: SEC filings

Those biotechs that didn’t have a CFO at the time of their IPO varied in their rush to put one in place.

The three biotechs with interim CFOs appointed a permanent CFO between 75-454 days later.

Meanwhile, Lexeo Therapeutics, which didn’t have any kind of CFO at IPO, took 413 days to make its permanent appointment.    

The cons of the “hire a CFO later” strategy.

While postponing hiring a CFO until after an IPO likely saves biotechs money, we would argue that in the long run, the cost savings (or dilution) barely move the needle for investors.

Such a strategy also comes with several drawbacks:

• While biotech CEOs are likely to have already raised several rounds of private financing, a CFO with prior public experience is likely to bring valuable relationships with potential public investors that could participate in an IPO.
• A CFO who has already been through an IPO can project-manage the process, including putting together a banking syndicate (based on prior relationships) and negotiating syndicate economics. In addition, they can oversee the other documentation and infrastructure needed to go public (including IR).
• As the second officer at a company, a CFO can immediately share in the workload of post-IPO investor meetings, healthcare conferences, etc. Put another way, on a biotech’s first day of trading, the company will have two C-suite officers as credible public faces of the company (alongside a CMO who can be wheeled out on special (data) occasions).

Finally, I would argue that not having a CFO at the time of IPO puts undue additional stress on a biotech’s CEO and finance team, even if they have gone through the process before.