Fundraising struggles, an LSE surprise and Ireland’s burgeoning biotech ecosystem

For many private European biotechs, flat or down valuations have become the new normal as they struggle to raise money despite having quality science, +ND Capital’s Dani Bach said on a special edition of the BioCentury This Week podcast. Investors, he said, are flocking to a handful of outsize fundraising rounds out of fear. 

In conversation Monday with Jeff Cranmer and Stephen Hansen of BioCentury and Poolbeg’s Jeremy Skillington, participants in BioCentury’s Bio€quity Europe conference, Bach described a bipolar fundraising environment in which the “bulk of companies are struggling for money and a few are getting massive amounts of money even beyond their wild expectations.” 

“Those companies that are gathering massive valuations with a lot of investors around, and raising much more money than they initially thought, I believe paradoxically that this is coming out of fear,” Bach said. While raising as much money as possible to navigate difficult times is “a good thing to do,” he argued that many investors are operating “under a herd behavior.” The bear market has made them more “comfortable investing in big syndicates in a company that has a lot of money around the table, [with] many other investors checking the boxes.”

Skillington, CEO of Poolbeg Pharma plc (LSE:POLB) and former head of BD for Inflazome Ltd., described the role the Elan “diaspora” and the 2020 acquisition of Inflazome by Roche (SIX:ROG; OTCQX:RHHBY) has had in fostering the growth of Ireland’s biotech ecosytem.

“The people that were trained and gained the experience at Elan, now had knowledge and expertise of an industry that they could spin out companies; they could form new companies; they could fund new companies. So there was certainly a lot of appetite to kind of continue the Elan story,” Skillington said. “A lot of these pharmas maybe not as large. I do think we’re on the smaller scale of biopharmas. It’s the lean and mean insofar as you can do the virtual biotech model.”

He also commented on Poolbeg’s path to listing on the London Stock Exchange’s AIM and how the company is seeking to build value for its investors.

Hansen noted that LSE-listed U.K. companies have outperformed U.K. companies that have listed on NASDAQ in the past five years.

“When you look at European companies going to NASDAQ, many of them do not get the same attention from American investors that American companies do,” said Bach. In some cases, he said, “they may be better off staying in the European market.”

This week’s podcast is sponsored by Jeito Capital. For information on how to sponsor BioCentury This Week and/or The BioCentury Show, please contact Sarah Shoaff at sarah.shoaff@biocentury.com.