STOCKWATCH: Echoes from the last biotech bubble
This article was originally published in Scrip
Broad stock markets seem to be schizophrenic; flitting between the worry of a tapering of quantitative easing in the US, a credit crunch in China, and then just ignoring all those issues. The US biotechnology sector mirrors this duality but for different reasons with the NASDAQ Biotech index (NBI) being off almost 7% from its mid-May peak, but IPOs and secondary offerings still flood the market.
You may also be interested in...
Time is the least considered driver of asset valuations in life sciences – and may be a factor behind the low level of M&A deals so far this year. ICON’s Andy Smith provides some advice to the C-suite and business development managers on strategies to clarify the duration aspect in risk-sensitive transaction negotiations.
Mid-cap biotech companies Alexion and United Therapeutics both missed fourth-quarter sales expectations and although Intercept beat analysts' estimates with $13.4m in sales, does that justify a $3bn valuation?
Debt-fueled acquisitions helped Teva, Shire and Allergan report well-received fourth-quarter earnings. But sector circumstances have changed since 2016 and the ability to grow by debt-funded acquisition is now severely restricted.