Biotech had a historically rich quarter
There has never been a better time to raise money in biotech than the second quarter of 2020, as IPO dollars and private financings set records despite a global pandemic.
Biotech companies raised a record-breaking $6.4 billion during the quarter, and IPOs brought in more than $13 billion, which is also a record high, according to numbers compiled by Atlas Venture partner Bruce Booth. If you add the proceeds from follow-on public offerings, which set a five-year record, the biotech industry raised $24 billion over the course of three months.
That’s obviously good for the sector at large, but, if past biotech boomlets are an indication, it could be a net negative for the cause of actually developing good medicines. When money is tight, only the most promising ideas get funding. When cash is easy to come by, as it was back in 2015, it tends to flow into mediocre companies whose later failures fuel a downturn.
Biotech companies raised a record-breaking $6.4 billion during the quarter, and IPOs brought in more than $13 billion, which is also a record high, according to numbers compiled by Atlas Venture partner Bruce Booth. If you add the proceeds from follow-on public offerings, which set a five-year record, the biotech industry raised $24 billion over the course of three months.
That’s obviously good for the sector at large, but, if past biotech boomlets are an indication, it could be a net negative for the cause of actually developing good medicines. When money is tight, only the most promising ideas get funding. When cash is easy to come by, as it was back in 2015, it tends to flow into mediocre companies whose later failures fuel a downturn.
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