Fighting for the Exit in Biotech IPOs
This article was originally published in Start Up
Biotech IPOs continue to get done, but not at valuations private investors would prefer.
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Acquisitions and crossover investors are just beginning to push up IPO prices for the best biotech offerings, providing the first hints of real competition for shares of new issues.
While START-UP first noted an industry-wide tendency to overestimate the prices IPO investors were willing to pay in early 2005, IPOs have regularly fallen short of the anticipated price ever since, with few exceptions.
While the venture capital community spent roughly the same in biopharma investments in 2006 as they did in 2005, they put considerably more money into mid-stage companies (Series B and C investments), and slightly less into Series A and mezzanine rounds, than they had in 2005.