Is it time to worry about biotech IPOs?

Entasis Therapeutics had a tidy story. The world is demonstrably in need of new antibacterials, and the company, spun off from AstraZeneca, has a pipeline of therapies that fit that very definition. And yet within hours of going public yesterday, Entasis’s shares fell nearly 30 percent.

This year has been the best in recent memory for biotech IPOs, with 45 companies going public. But, accounting for Entasis, 40 percent of those companies are now trading below their IPO prices. And a handful of them — including Constellation Pharmaceuticals, Neon Therapeutics, and Unity Biotechnology — are down despite reporting no negative news since going public.

The median return on 2018’s IPO class is still positive, but it’s on the decline. As of yesterday, the median company was up about 7 percent; back in June, that number was 19 percent.

It could be a case-by-case story of investor discern. Or it could be a sign that the market is beginning to sour on once-lofty biotech valuations. We’ll have to wait and see.