3Q Financial Markets Review: Watching funds flow

Blinders often are used on race horses to keep the animals focused on the race at hand, and away from the distractions and chaos going on around them. Biotech CEOs and investors probably wouldn't be faulted for wanting a similar technology that could keep them focused on the end game.

While it can be disheartening that fundamentals go unrewarded in the current market, there's a growing consensus that when - not if - the markets return, biotech will be quick off of the bottom. This reflects both the industry's fundamental progress and - ironically, given biotech's historical volatility - investors looking for safe places to park their money.

While the wait poses no problem for well-capitalized companies, there is growing concern about companies that will need to tap funds over the next 12 months. Biotech's balance sheet arguably is as healthy as it has ever been, thanks to the $47.1 billion raised in the past seven quarters. But there is a growing list of companies - 81 by BioCentury's tally - with less than two years of cash.

Despite good balance sheets and strong fundamentals - as of last Friday, biotech companies had compounds in 288 Phase II/III or Phase III trials - the BioCentury 100 slid 28% in the third quarter, putting it down 44% on the

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