More Money is Being Invested in Life Sciences and Biotechnology Companies
Life sciences and biotechnology companies have certainly weathered the most recent recessionary period and now are beginning to attract the attention of the capital markets. Money is flowing into life sciences companies from all sources including general solicitations through crowdfunding, venture capital and private equity investing, and initial public offerings. The IPO window for life sciences companies is wide open and will continue to be sustainable as long as the economy continues to show signs of improvement and growth.
Timing is everything and many life sciences companies have advanced drugs in later-stage clinical testing, making them good candidates for public offerings. Also, many life sciences companies with products in later-stage drug discovery have been acquired recently by big pharmaceutical companies. Investors are starting to see great returns in the life sciences and biotechnology space. For the first half of 2013, twenty-four life sciences companies have gone through an IPO--almost double the normal activity. Of the twenty-four IPOs, twenty were drug discovery companies, three were diagnostic companies and one was a contract research organization.
For the first half of 2013, venture capital firms continued to exhibit strong demand for life sciences companies. U.S. life sciences companies raised $1.9B of new capital in the first half of 2013, which is more than 40% more than they raised in the first half of 2012. In the first six months of 2013, approximately 25% of all venture investing was targeted to the life sciences sector.