Biotech braces for a fallow period on Wall Street

The analysts at Cowen have a few ways to describe the mood when it comes to new biotech IPOs, and their descriptors — "below disinterest" and "toward anger" — may not inspire confidence. Across the industry, “if there was anything good about December it was only that it ended.”

As for IPOs, “the window may not have closed completely, but investors will be very choosy over the next several months, selectively supporting companies with strong fundamentals, pedigreed management, and attractive valuations,” the analysts wrote. (That suggests they were open to weak fundamentals, unproven management, and absurd valuations last year, and actually when you look at 2018 IPO performance, there might be a case there.)

Anyway there are signs that biotech is bracing for a fallow period on Wall Street. Atlas Venture, which made its name investing in startups at the earliest stages of corporate life, just unveiled a new fund to back companies that grow past the Series B stage — companies that would have been IPO candidates in friendlier times.

Atlas’s move follows similar ones from Medicxi and Sofinnova Partners, FierceBiotech points out, and could be a signal that venture capitalists are preparing for a long winter.