According to the head of the life sciences practice at BMO Capital Markets Corp., in 2013 “[r]ocketing biotech stocks provided much needed fuel for the biotech ecosystem, facilitating IPO [initial public offering] exits for venture investors.” While 2014 has started off strongly, “with the NAsDAQ Biotech Index up over 8%,” Annette Grimaldi sounds a note of caution “to the early good news,” noting that “the massive flow of financing activity may strain investor capacity to evaluate and invest in new companies.

If early 2014 IPOs struggle to price or trade poorly in the after-market, public investors may be less willing to take a chance on later deals.” she also observes that “the continued strength of the broader market is critical to the performance of the biopharma sector.” See Nature Biotechnology, March 2014.