Seeing Beyond the IPO Window Dressing
Summary
Seeing Beyond the IPO Window Dressing Opinion Xconomy San Diego — In his Life Sci VC blog, Bruce Booth recently wrote “Biotech is back with a vengeance in this IPO window.” It’s an accurate snapshot of the market, but the good times he describes accrue to money and sweat equity already long in the ground.In a business with a 10- to 15-year product development cycle, today’s investors and managers need to focus on the strategic implications of the market.In his post, “What’s Behind The Booming Biotech IPO Market,” Booth identified four factors that are influencing the market: The return of the generalist investor; the performance of recent offerings; large amounts of capital pumped into a small sector by pharma acquisitions (what he refers to as ‘recycle scarcity); and the positive effects of the JOBS act.The last three windows—in 1991, 1996, and 2000—occurred in periods of expansive monetary policy, not surprisingly in sync with presidential election years.Today Ben Bernanke is printing money at the rate of a trillion dollars a year.