Biotech momentum on financial markets
How long can the IPO window for biotech companies stay open? One of the most frequently discussed questions right now on European stock markets, that question is dividing the experts into two groups: those who see the glass as half full, and those who swear it’s half empty. Naveed Siddiqi is one of the former. As an investor for France-based Edmond de Rothschild Investment Partner (EDRIP) he sees the overall situation as still positive. “We have more capital in the market, and 2014 was the best year in the last 15,“ he told European Biotechnology.
EDRIP has seen several valuable transactions this year – via both trade sales (Covagen) and IPOs (Genticel). “We may have fewer and smaller IPOs in comparison to the US, but at least we have them,“ Siddiqi points out. Together with a new wave of seven private funds pouring fresh venture capital into the life sciences market (see table, p. 37), the overall financial situation for European biotech companies looks more promising than it has at any point in the recent past. That has led to growing confidence among biotech firms. “Competition is good for business,” concludes Jack Nielsen, a partner from Danish Novo Ventures. “With the stock market as an alternative exit route, we have definitely seen trade sales with higher volumes this year, because companies had more than one option.“
A significant upswing
Does this spell good news for the European capital market? At the very least, recent study results show a significant upswing on public indices. According to a new BIOCOM study, a total of €2bn was poured into biotech companies in Europe via the stock exchange in 2014 (2013: €1.89bn). The number of IPOs had doubled to ten by the end of Q3, raising to 144 the total number of biotech companies listed on the 15 most important stock exchanges in Europe. In the aftermath of the crisis years 2011 and 2012, all indicators now show signs of an upswing throughout all trading centres, the study notes.
“The dry spell is over. The capital market in Europe has once again turned towards biotech,” says Boris Mannhardt, CEO at Berlin-based BIOCOM, who presented the results of the report at the end of November at the German Equity Forum 2014 in Frankfurt. Just the month before, however, the sector’s recent euphoria had showed signs of waning due to global turbulence on stock markets.
Read the full background on the capital market upswing in our print magazine!
- The IPOs that marked the end of the dry spell
- European Biotech Stock Market Ranking
- Overview of new biotech funds relevant for European biotech companies
- More on the 2014 report