Public Biotechs – Light at the end of the tunnel, although private Biotechs may have to wait a bit longer

Amsterdam March 2012: An overview of the state of the Biotech Industry was given by BIOs Industry Research & Analyst David Thomas at BIOEuropeSpring in Amsterdam. He made three main points:

  • Public market have gained 25% in the last couple of month
  • Private Biotechs still have a hard time to find investors
  • Partnering and deal making has become more competitiv

 

So the good news is that the public market has made an upswing in the last 5 months. Biotech is the industry with the highest gains (NASDAQ Biotech Index +25%). Companies have been able to raise money on the public market, for example AMICUS THERAPEUTICS which raised USD 62 m, or CELLDEX THERAPEUTICS LTD raising USD 40.4 m in Q1 2012. Looking at it in more detail, public investors seemed to focus more on public early stage / < USD 100 m companies and thus their gain was even more impressive.

Private companies however, have more difficulties raising money. In the US, according to Thomas, money has increased, but financing deals have decreased. This is also consistent with our own research and Biotechgate database, where we see that especially in Europe the financing of private companies has had a difficult start in 2012. Investors tend to prefer already “de-risk” companies with a service component, late state or single asset companies. The majority of private biotech companies have not reached this level yet.

The partnering side has become even more competitive. Companies are very active at partnering meetings such as BIO Europe Spring, with the number of meetings constantly increasing. However, the statistics from David Thomas also show that the number of partnering deals has decreased since 2009, and this is true for all stages of development.

The slides presented by Thomas at Bio Europe Spring you will find here.

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