Preclinical biotech companies are having an IPO bonanza. What’s the draw for investors?
Why are preclinical IPOs suddenly back in vogue?
Not too long ago, a biotech company had to be at least in the middle stages of drug development if it expected the public markets to pay it any mind. But in 2018, six preclinical companies have managed to pull off IPOs, with an average return of 31 percent?
What changed?
It depends on who you ask. One portfolio manager told STAT's Adam Feuerstein that biotech's investor base has changed: The funds once considered "dumb money" now employ PhDs with the expertise needed to handicap early-stage science. But one VC called the trend "an ominous sign of an overheated market."
“When you see so many preclinical companies all rushing to IPO, it tells you that there’s a correction around the corner,” the VC said.
Read more.
What changed?
It depends on who you ask. One portfolio manager told STAT's Adam Feuerstein that biotech's investor base has changed: The funds once considered "dumb money" now employ PhDs with the expertise needed to handicap early-stage science. But one VC called the trend "an ominous sign of an overheated market."
“When you see so many preclinical companies all rushing to IPO, it tells you that there’s a correction around the corner,” the VC said.
Read more.
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