>> A friend from Sillycon Valley told me that venture capital loves biotech right now - is this a contrarian indicator? Who's got the crystal ball? <<
Anything but! It's an influx of capital into the sector, and backs the development of overall pipeline.
In general, it takes about eighteen months for public valuations to catch up with enthusiasm in the private sector. Once that happens, it can spell problems (if not for 11/99 to 3/00, venture capitalists would have been trapped in the classes of '97 and '98).
No..... the glut of VC is causing troubles for those who hit the last rounds. There is a real threat, if the IPO window doesn't open, of down rounds. But it's nothing but good news for the typical small cap biotech investor, particularly at this time when there are so many "big science", loaded-with-cash opportunities selling at low cap:book.
We've just seen two public/private mergers, one where the private company took out a respected biotech.
This is heaven on Earth for the small cap biotech investor. Money in front of us, money behind us, looking for good projects and enabling platforms. Economy sucks, however, and that rules the day. Let's hope that Greenspan et al. can pull the nose up. |
