2021 Financial Markets Preview
A maturing mid-cap sector could keep funds flowing into biotech
2021 Financial Markets Preview: Buysiders expect broad capital availability to continue following record fund-raising year
Buysiders expect broad capital availability in 2021 to continue following record fund-raising year.
While it’s too early to say whether 2020’s record year of fund-raising constitutes a “new normal,” there’s consensus among buysiders and bankers that a cheap money environment will continue in 2021 as central banks manage a fragile economic recovery, meaning biotech CFOs shouldn’t have trouble tapping the public markets.
Some investors are wary of how long biotech’s run-up can continue, but others argue its upward trajectory is long overdue, and that a growing universe of mid-cap biotechs that offer more liquidity and revenue stories to pick from should translate into a sector that is more broadly attractive to investors than it was even five years ago.
“I think the sector is better positioned from an operational and clinical perspective than ever in its history,” Stifel’s Peter Reikes told BioCentury. “I think it is more accepted by investors as a sustainable asset class.”
Loncar Fund’s Brad Loncar agreed. “Biotech has always been a niche in the stock market. I think it really did essentially go mainstream this year,” he said.
Biopharma’s central role in solving the COVID-19 crisis has brought in momentum investors that