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Finance Watch: Biotech Valuations Seesaw On Bank Failure, Pharma M&A

SVB Shutdown Hurt, Pfizer/Seagen Deal Helped Sector

 
• By Mandy Jackson

Public Company Edition: The closure of Silicon Valley Bank sank biotech stocks in the first full week of March, but valuations rose the next week when two big acquisitions were announced. Also, J&J’s consumer health spinout sold $7.75bn in notes ahead of its future IPO and Karuna grossed $400m in a follow-on offering.

Finance Watch Public Company
• Source: Alamy

With biotechnology stock valuations down for more than two years since peaking in February 2021, the industry has gotten somewhat used to volatility, but recent fluctuations paint a clear picture of how sensitive biotech stocks are to major events impacting the sector.

The total value of the global biotechnology sector, defined as pre-commercial therapeutics companies traded on any stock exchange around the world, fell 12.2% during the week ended 10 March to $188bn from $214bn the week before, according to data collected by CapitalIQ in Torreya Partners LLC’s weekly Biopharma Market Update. At the end of that week, Silicon Valley Bank – a bank and lender for many biotech and high-tech companies and venture capital firms – failed and was shut down

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