BioCentury
ARTICLE | Finance

Paper cuts

Why companies raising follow-ons were crushed last week

January 11, 2016 8:00 AM UTC

The predicted crush of biotech paper arrived on schedule, but sour macro conditions resulted in companies taking much bigger haircuts on follow-ons than have been seen in years. Bankers think the pain is worthwhile for companies with upcoming clinical milestones - which wasn't the case for 10 of last week's 13 deals.

The deals raised a combined $1.4 billion. The median haircut on the deals was 16%, far steeper than the median 7% haircut in 2015 (see "Money Razed"). ...