A biotech barometer is going public
We don’t talk much about contract research organizations, the Amazon Web Services of drug development, but a planned IPO shines a light on their barometric importance.
This week, CRO giant PPD is expected to raise $1.5 billion in a public offering that would value it at roughly $9 billion. Baked into that valuation is the assumption that pharma companies are going to spend more and more on science and that biotech startups are going to keep proliferating thanks to, as PPD puts it, “a robust funding environment, both public and private.”
That makes PPD’s IPO interesting to watch. Buying stock in a major CRO is a bit like buying into a biopharma index fund. If investors agree with PPD that the industry is ascendant, this should be a successful offering. If sentiment is waning ahead of a contentious election, however, PPD might bear the brunt.
This week, CRO giant PPD is expected to raise $1.5 billion in a public offering that would value it at roughly $9 billion. Baked into that valuation is the assumption that pharma companies are going to spend more and more on science and that biotech startups are going to keep proliferating thanks to, as PPD puts it, “a robust funding environment, both public and private.”
That makes PPD’s IPO interesting to watch. Buying stock in a major CRO is a bit like buying into a biopharma index fund. If investors agree with PPD that the industry is ascendant, this should be a successful offering. If sentiment is waning ahead of a contentious election, however, PPD might bear the brunt.
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