Wall Street still believes in biotech
Or at least that’s a reasonable takeaway from the resounding success of Royalty Pharma’s IPO yesterday, which traded up about 60% the second it debuted.
The company, which makes money by buying royalty stakes in other people’s medicines, raised $2.2 billion in its offering and closed the day at a valuation above $25 billion. That made for the largest IPO in drug industry history, beating Moderna’s record-setting listing from 2018.
Royalty Pharma’s popularity among investors is an affirmation of the company’s business model, which depends on picking winning drugs and negotiating accretive deals. But it’s also a good sign when it comes to market sentiment about biotech. Buying into Royalty Pharma is buying into the idea that the industry will continue to invent superlatively lucrative products. The company’s ascendant valuation suggests the market is still bullish on biotech’s future.
Read more.
The company, which makes money by buying royalty stakes in other people’s medicines, raised $2.2 billion in its offering and closed the day at a valuation above $25 billion. That made for the largest IPO in drug industry history, beating Moderna’s record-setting listing from 2018.
Royalty Pharma’s popularity among investors is an affirmation of the company’s business model, which depends on picking winning drugs and negotiating accretive deals. But it’s also a good sign when it comes to market sentiment about biotech. Buying into Royalty Pharma is buying into the idea that the industry will continue to invent superlatively lucrative products. The company’s ascendant valuation suggests the market is still bullish on biotech’s future.
Read more.
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