Biotech IPO Market: Boom or Bubble?

The Biotech IPO window is open for business and doing very well. Year to date, there have been 30 new offerings raising $2.5+ Billion making this the  2nd busiest IPO year in the 30+ year history of the industry.

No one predicted we’d be in the midst of such a sizzling biotech market.  Frankly, many in the VC community were saying just the opposite that the market was dead and too risky to get into. But several initiatives running on parallel tracks have merged together create this market: 1) the Food and Drug Administration (FDA) has accelerated its approval process allowing of 39 new drugs to come to market; and, 2) the  JOBS Act that provided for more university research that lead to new discoveries and an all new round of therapies into the drug development pipeline. Many of these were of the personalized platform variety that leads to quicker testing and approval.

Further, beyond just “going public”  in a related sector, healthcare IPOs will have fresh capital, as it is best performing IPO sector of 2013, up 64% on average year to date following their offerings, besting all other sectors according to Renaissance Capital (see chart here).

Mr. Dave Thomas, BIO’s Director of Industry Research and Programs said at the BIO Investor Forum in San Francisco, “If it was a bubble, the smallest companies, and the riskiest, would be outperforming. This is not the type of behavior you’d see in a bubble,” Thomas said.

It’s an exciting time, and great for the industry sector to be able to impact health outcomes, in addition to feeding and fueling the world.


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