It’s a good time to be in biotech finance
There’s a lot of attention paid to how biotech’s protracted boom has, for example, virtually cured hepatitis C and brought hope to patients with previously untreatable cancers. But less discussed is the fact that it has made a mint for Wall Street’s spreadsheet artists.
As The Wall Street Journal reports, it’s a sellers’ market for sell-side analysts in biotech, where compensation vastly outpaces other industries and banks are outbidding one another for brand-name talent. It’s something of a curious trend, as analysts are legally prohibited from shilling for their employers and thus have debatable importance to banks’ bottom lines. Furthermore, their conspicuously bullish recommendations have a mixed track record when judged against the actual market, raising questions about their value to clients.
Meanwhile, on the buy side, the seemingly overnight rise of China’s biotech space has created a lucrative outlet valve for bankers bored of the States. As Bloomberg points out, China has no shortage of money and opportunity, but it is comparatively lacking in biotech investment expertise. And thus there’s an escalating demand for U.S. talent willing to move east and take a chance on the fast-growing sector.
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