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Venturing into the Brave New World of Diagnostics Start-Ups

 
• By Wendy Diller

Few diagnostics start-ups are {bona fide} business successes, and that has put a damper on venture capital interest in the field. But this hasn't stopped start-ups trying to meet needs in cancer diagnostics, sample preparation and point-of-care.

Few diagnostics start-ups are bona fidebusiness successes, and that has put a damper on venture capital interest in the field. But it hasn't stopped some hearty pioneers from making bets on diagnostic tests. Perhaps they are attracted by the shorter time-to-market for diagnostics than pharmaceuticals or biotechnology, or the promise of a technology that meets an unmet need. Then again, diagnostics IPOs seem to garner attractive step-up multiples; a 5.2 pre-money average in 1997 and post-money average of 8.4, better than pharmaceutical companies' post-IPO multiple of 3.14 and 5.0 for device IPOs (including financings through August of ‘97), regardless of their eventual business success.(Step-up multiples calculate the increase in value from one financing round to the next by dividing pre-and post-money IPO valuations by total private investment.)

If investor interest is low, it isn't because the world has all the diagnostic tests it needs. And it isn't...

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• By Eleanor Malone

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• By Kevin Grogan

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BIO Notebook: MFN Pricing, Next-Gen Obesity R&D, FDA’s Rare Disease Hub & Reaction To Review Program

 
• By Sarah Karlin-Smith, Mandy Jackson, and Alaric DeArment

Highlights from Day 3 of the BIO International Convention include the realities of MFN pricing, AstraZeneca's R&D plans for obesity, the need for resources for FDA's rare disease hub and reactions to the Commissioner's National Priority Review Voucher program.