Thirty-eight biotech IPO’s this year. The NASDAQ Biotechnology Index is up 50 percent YTD. Are we in a boom or a bubble? At the 12th Annual BIO Investor Forum, that was the question on everybody’s mind. Nearly 600 biotech industry leaders, investors, and reporters gathered in San Francisco to find business partners, make connections, and hear our panelists discuss everything from Crowdfunding, the GAIN Act, the JOBS Act, and, of course, the booming IPO markets.
Investors, for their part, were optimistic. Tim Hay of the Wall Street Journal writes:
- Those in the know are calling it a boom, and saying the good times are likely to continue for biotech, even in the face of clinical setbacks and other bumps in the road.
- These were the impressions of investors in both publicly traded and privately held biotechnology companies who served as panelists at the Bio Investor Forum in San Francisco.
Be sure to read his whole piece: Biotechnology Boom is Here to Stay, Investors Say
Mandy Jackson of Scrip also sensed the optimism in her excellent account of the event, BIO Investor Forum: Bubble, boom or just robust; biotech financing’s recent revival :
- Individual companies may exist in a bubble that’s likely to burst and leak a lot of value, but Mr McCulloch said there is no bubble in biotech.
- The stability of the IPO market will depend on venture capital investors, who’ve had to hold or increase their ownership in companies to make first-time offerings attractive to public market investors. Venture capitalists must wait until the end of so-called “lock-up” periods to sell their stock in companies after the firms begin trading in the stock market.
- In contrast to the peak in 2000, which turned out to be a bubble, Thomas said the current marked surge is backed up by solid data being produced by companies, particularly the larger biotech companies.
- “If it was a bubble, the smallest companies, and the riskiest, would be outperforming,” Thomas said. Instead, market attention has been directed to those larger companies that are producing results, and the smaller companies have actually been lagging in investment dollars. “This is not the type of behavior you’d see in a bubble,” Thomas said.
We’ll have video from the event in the coming weeks; be sure to subscribe to the BIO newsletter for full coverage.