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3Q22 — more malaise in the markets

Nature Biotechnology volume 40, pages 1542–1545 (2022)Cite this article

This quarter, for the first time in 2022, both public and private funding dropped compared to previous quarters. There were 12 initial public offerings (IPOs), up from just 5 in 2Q, but valuations were low, reflecting a high proportion of investments in diagnostics and the locations of the companies involved — half were in China and Korea. In the public finance markets, the dollar value of follow-on offerings rose to more than twice its value in either of the two preceding quarters and PIPEs perked up, too. Both indicators suggest that sanguine investors now feel public biotech stock valuations have declined to an investable level (when discounts are included) from the frothy highs of 2020 and 2021. There was some sign of returning confidence in US stock markets and technology stocks in particular during July and August, but those gains had evaporated by the end of September. Biotech stocks in any case lagged other sectors on NASDAQ. Venture capital funding in biotech was 25% less than in 2Q although this was a smaller drop than in non-biotech sectors, which fell by a third. The B rounds from circular RNA therapeutics company Orna and from Parker Institute for Cancer Immunotherapy spin-out Arsenal Biosciences stand out.

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  1. Senior Editor, Nature Biotechnology https://www.nature.com/nbt

    Laura DeFrancesco

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  1. Laura DeFrancesco
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DeFrancesco, L. 3Q22 — more malaise in the markets. Nat Biotechnol 40, 1542–1545 (2022). https://doi.org/10.1038/s41587-022-01541-6

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