Biotech: The Featherweight Champion Of The Markets

biotech the featherweight champion of the markets

Sumary of Biotech: The Featherweight Champion Of The Markets:

  • For those of us in biopharma, it feels like it a large and dynamic sector populated by an endless number of large and small companies, scientists, business types, pundits, lawyers, accountants, and more..
  • The top 3 Tech companies have a greater combined market capitalization than all of the biotech and pharma universe combined (>$3.5T), including near ~1K publicly-traded companies..
  • That right – just three companies, Microsoft, Apple, and Amazon – are collectively bigger in market cap than the combined valuations of J&J, Pfizer and all of the other biopharma companies down to the most recent IPO and micro-cap stock..
  • Further, the 600+ players in the pre-commercial small and mid-cap biopharma universe, the space we often call “biotech”, are almost exclusively reliant on fund flows from the broader equity capital markets for their survival..
  • Here are a few observations about how biopharma, and the Life Sciences (LS) sector more generally, fits into the broader financial world, courtesy of data from Cowen &.
  • Because the life sciences are largely a cash-raising, loss-making, equity-burning sector, it is a much larger percentage of the new equity issuance market..
  • For all of the IPOs and Follow On public offerings on the US stock exchanges, life sciences represent 13% of the aggregate market valuations of these issuing companies, 20% of all the proceeds from these offerings, and 40% of the number of offerings..
  • Funding flows into biopharma companies from Life Science venture capital, IPOs, and FOPOs have therefore all edged up in terms of “market share”.
  • The increasing role of biopharma in the new issuance market has increased the numbers of publicly-traded LS companies..
  • As I wrote in a 2011 blog post, “Our Shrinking Biopharma Ecosystem”, the number of publicly-traded biotechs in the US had dropped by over 25% from 2005 through 2011..
  • As evidence of this, biopharma has been increasing in both its share of the companies and the value-weighting in the Russell 2000 index…

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