What happened to all the biotech IPOs? Part II

Last week we wondered why what had been an extravagant market for biotech IPOs simply dried up in July. Yesterday we got a possible explanation.

The analysts at Cowen surveyed 64 investors and found that about 70% of them reported having less desire to buy into IPOs than they had just six months ago. Digging into that figure, 46% of respondents said their interest had “decreased somewhat,” while 24% said it had “greatly decreased.”

That’s bad for the bio-capitalist ecosystem, which relies on a healthy IPO market to drive up startup valuations, give VCs a reason to invest in those startups, and provide entrepreneurs an incentive to start them. It’s a worrying sign when, as Cowen put it, “investors continue to view biotech as the cold ocean that no member of the polar bear club wants to jump into first.”