Investing in biotechnology stocks used to be seen as risky enterprise offset by the prospect of spectacular rapid growth. But two years after a COVID-provoked biotech investment peak, biotech has become even more part of the mainstream, it seems. The NASDAQ Biotech Index (NBI) no longer tracks with the tech and e-commerce stocks such as Apple, Cisco or Airbnb that contribute to the general NASDAQ index; instead it more closely follows the Dow Jones Industrial Index, which reflects the performance of firms such as Walmart, McDonald’s, Visa, Boeing, Coca-Cola and Nike. The spectrum of financing in 2023 also reflected a tighter relationship between biotech and established firms, and a loosening of ties to capital markets. The public equity markets for biotech struggled during the year, with fewer than 50 initial public offerings (IPOs), a drop in follow-on offerings, and debt financing virtually non-existent. Closed public markets discourage venture investment, which was down one-third on its level in 2022 and down over 50% on the recent peak of 2021. That contraction in venture capital and public equity markets made biotech financing more dependent than ever on industrial funding through partnerships or via merger and acquisitions. Partnerships indeed were the biggest single source of biotech financing in 2023. There were some glimmers of hope remaining. Even though the upper threshold for venture rounds was down, four of the largest ventures round were A rounds, suggesting renewed interest in novelty. Apart from Acelyrin, which flopped after clinical failure of its anti-interleukin-17 mimetic, the stock prices of the companies with largest IPOs all performed well after flotation. Most notable perhaps was RayzeBio, which raised $337 million in its IPO in September for its targeted radiopharmaceutical portfolio and was acquired in December by Bristol Myers Squibb in mid-December. Its almost as if investors lined up the deal at the IPO after-party.
| 2019 | 2020 | 2021 | 2022 | 2023 |
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Asia–Pacific | 39 | 56 | 69 | 27 | 25 |
Europe | 7 | 13 | 43 | 5 | 1 |
Americas | 53 | 82 | 107 | 18 | 17 |
- Source: BCIQ BioCentury Online Intelligence
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