For biotechs of a certain ilk – older than five years with a mid-to-late stage clinical program – the decision to test the public waters may feel like a Hobson’s choice. Assuming the start-up’s venture investors are patient and will continue to back the group, the company can stay private and continue to push candidates through the clinic, hoping an M&A exit may materialize. Certainly given today’s capital markets, it’s easier for a biotech to choose such a path – if it remains open. But as venture capitalists ramp up fundraising efforts of their own, they also need to push for liquidity events, and absent an acquisition, the only choice may be a public offering.
Public investors certainly don’t have much enthusiasm for companies without revenue, which suggests that biotechs opting for a public debut...
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