The B-word is back, and it rhymes with "trouble." With 21 U.S. initial public offerings in April alone, no wonder the barbarians are lined up at the gates, clamoring to get a piece.
Financings Of The Fortnight Wonders If The IPO Bubble Will Spread To Biotech
The B-word is back, and it rhymes with "trouble." With 21 U.S. initial public offerings in April alone, no wonder the barbarians are lined up at the gates, clamoring to get a piece.
There have been 31 IPO filings so far in April, the most active month since 40 companies filed in August 2007, according to IPO watchers Renaissance Capital. Exciting, no? So, how many of these newly minted or wannabe public companies are in our little corner of the world? Two IPOs, Tranzyme and Sagent Pharmaceuticals, and no new filings.
Let that sink in for a moment. It's Bubble 2.0, or 3.0 or 6.0, with little old ladies in Pasadena trying to grab a piece of Facebook on private secondary markets, and not a single biotech firm filed papers this month.
Now, there might be some moral high ground in keeping one's distance from what some might call "irrational exuberance." A bubble is generally a bad thing, leading to Pets.com and far too much exposure of Angelo Mozilo's tanning-bed face.
But to those on the bio side of the fence, the lush green grass of Mark Zuckerberg's backyard looks awfully tempting. At BayBio last week, when talk on a mid-stage funding panel got around to building strong biotech companies, Pfizer business-development executive Jim McLoughlin cautioned other panelists to think long-term and not create a bubble. Versant Ventures managing director Camille Samuels jumped in: "Hey, I'll take a bubble!"
She said it with a laugh, but consider the venture capitalist's alternative these days: Waiting for guys like McLoughlin (and the committees behind them) to decide they like your portfolio firm's Phase II asset enough to offer a modest upfront payment and earn-outs or milestones.
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