A partner at a major Cambridge, Mass.-based venture capital firm is confident investors’ appetite for biotech startups will begin to increase in the fall.

Bruce Booth spent two decades at Atlas Ventures, which specializes in biotech newbies. He thinks the lull in capital flows in the industry is already turning around. He has seen investors’ enthusiasm for biotechnology wax and wane several times, and after the recent period of “decay” he sees an upward trend.

Of course, he is starting from a relatively small base. After a few explosive years when biotech startups flooded the public market, initial public offerings hit the proverbial wall. According to BioPharma Dive, only 16 companies priced new stock offerings in 2022, compared to 82 in the same period last year. Half of them have raised less than $40 million, a far cry from the valuations that new biotechnologies obtained at the height of their popularity. Private financing for companies approaching an IPO also faces challenges.

Atlas puts his money where his mouth is. He is the founding investor of Third Harmonic Bio Inc. (THRD, Financial), which debuted this week, selling nearly 11 million shares for $17 each and raising more than $213 million, making it the biggest IPO in months. The shares rose to around $21.50 shortly after trading began, but have since fallen back to just below its offer price.

Market reception to Third Harmonic goes against a trend. BioPharma Dive reported that biotechs that went public in 2022 largely did so at significantly lower valuations, extending a steady decline in stock offering sizes over the past two years. Median IPO values ​​have fallen in six of the eight full quarters since the second quarter of 2020, when the median biotech IPO hit a recent high of $183 million.

So far this quarter, for comparison, three biotech companies have set IPO prices, raising $10 million, $8 million, and $10 million, respectively.

Atlas, which has 45 companies in its portfolio, bought additional shares of Third Harmonic on September 19. Along with the convertible preferred shares, the fund became more than 10% owner of the company.

Third Harmonic is a clinical-stage biopharmaceutical company focused on developing a drug to treat severe allergies and inflammation. The company’s main target is hives, better known as urticaria, a skin reaction that causes itching. Chronic hives are welts that last longer than six weeks and often return over months or years. They can be very uncomfortable and interfere with sleep and daily activities.

Effective treatment would be welcomed by the approximately 25% of the population who suffer from hives at some point in their lives; at any given time, approximately more than 1.5 million people in the United States are affected.

Third Harmony’s drug is licensed by Novartis (NVS, Financial). It uses the same technique as a treatment from Celldex Therapeutics Inc. (CLDX, Financial), but has the advantage of being taken orally unlike Celldex’s injectable.

One can still wonder if the treatment of the third harmonic works. A first trial in Europe showed the drug reduced levels of a protein associated with an effect on hives. It started a phase 1b trial in Europe this month and expects to release data next year. A phase 2 study in the United States is expected in 2024. The company is also studying the drug in asthma and plans to evaluate it in a range of other allergic and inflammatory diseases, according to its IPO prospectus.