Biotech financing

Slowdown ahead?
Since the US garners the vast majority of all biotech financing
(86% in 2015), it makes sense to view it as a proxy for the
overall health of the industry. And signs of a financial slowdown
are readily available.
In the fourth quarter of 2015, for instance, activity decelerated
significantly in nearly every fundraising category except venture
capital, which held remarkably steady throughout the year.
Fourth quarter IPO activity shrank appreciably: biotechs raised
US$1.4 billion via 11 offerings in the third quarter, but in the
fourth quarter, newly public biotechs raised only US$497 million
across eight deals. Most ominously, no biotechs went public,
in the US or anywhere else, during December 2015 and
January 2016.
The drop in follow-on offerings was even more pronounced:
in the third quarter, biotechs pulled in US$4.4 billion across
48 deals, but in the fourth quarter, that fell to US$1.2 billion
across 27 deals. Debt practically vanished, too, but the third
quarter’s total was unusually high as a result of US$24 billion
raised by stalwarts Gilead Sciences, Biogen and Celgene.
In this environment,
the question to ask
isn’t whether the
climate is changing,
but just how long this
winter will last.
Beyond borders 2016 — Biotech financing
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