RE: Sunday Telegraph article10 Jul 2022 13:31
Here're selected 'highlights' -
...last year the biotech boom was in full swing, with a 60pc spike in public and private fundraisings for companies in the sector.
Now, however, the tide appears to be turning. Insiders say easy money is no longer so readily available.
Even Lord Drayson’s Sensyne Health recently found itself on the brink of collapse. Three of its shareholders ultimately agreed to a rescue deal in April, after it warned it was “unlikely to be able to continue to trade” without a loan. For other backers of the business, which included NHS trusts, the deal meant their holding was effectively wiped out.
It isn’t alone: there are echoes across both the public and private market.
Dr Sam Williams, managing partner of life sciences at IP Group, says the situation is “exactly what you expect when you’ve gone through a very heavy bull market, which we’ve had in biotech. In fact, biotechs had almost a golden decade from about 2011 to 2021.”
In part, this has been justified by the huge scientific leaps made in cancer and immunotherapy, and vaccine developments. “But even with all that, I’d say prices have definitely got ahead of themselves, and very speculative assets managed to float and raise money,” he says.
“What we’re seeing is a typical correction and when you have a correction, there is bound to be less enthusiasm or more caution among those who are writing a cheque, whether for the public biotechs or private biotechs.”
UK biotechs attracted £730m in venture capital in the first half of this year, compared to £1.4bn last year, according to a study by the BioIndustry Association. These businesses raised £28m in listings this first half, compared to £646m last year.
In Oxford, bosses are discovering that investors are looking for real proof points, signs of revenue growth and controlling costs. “Last year companies were able to raise on just a vision and still get big valuations,” one founder says.
Still, there are some companies still managing to land major funding rounds. Omass Therapeutics in April raised £75m, while fellow Oxford start-up MiroBio last week secured another £80m.
“The thing is, the best companies still attract significant interest,” says Katya Smirnyagina, senior partner of Life Sciences at Oxford Science Enterprises. “We have some companies that are better than others in our portfolio. And some companies are simply having an easier time raising money than others.”
The tough situation is even more pronounced on the public markets, where a spate of biotech companies have flocked over the past two years. For them, the global stock market rout has hit hard.
The whole situation makes it very difficult to make your share price grow because there aren’t those long-term investors here. You get people coming in with a very short-term view.
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