The NASDAQ Biotechnology Index reportedly rose in the first quarter of 2013 (1Q13) above levels last seen during the 2000 genomics bubble peak—the BioCentury 100 and NASDAQ Biotechnology indices increased 16-17 percent in the last quarter, while the Dow and S&P 500 were up just 10-11 percent. Still, the biotech industry raised less through initial public offerings and venture capital in 1Q13 when compared with the same period in 2012. In conjunction with a strong stock market performance, the biotech industry also saw job postings increase dramatically. In 1Q13, the top 25 companies posted 90 percent more jobs on Monster, 92 percent more on LinkedIn and 29 percent more on Naturejobs when compared with the previous quarter.
Still, while 2012 was a good year for funding the biotech sector as a whole, the private financing available to new, innovative, therapeutic companies has apparently continued a decline that began in 2006. University technology transfer is reportedly spinning out more startups than ever, but, according to Nature Biotechnology Business Editor Brady Huggett, “the lack of available capital to sustain fledgling companies does not augur well for the health of the innovative private biotech sector.”
Huggett suggests that investing is likely to increase this year given the available funds and because stocks performed well last year, but he believes that certain strategies could successfully address the disappearance of venturecapital funding for biotech startups. These include (i) universities focusing more on developing their own capabilities for validating discovery assets “and getting them to the stage where they are attractive licensing options for the biotech and pharma industry”; (ii) public biotechs becoming “acquirers themselves, and in this way, the pool of purchasers would increase”; and (iii) new sources of capital, such as venture philanthropists and patient groups, supplementing venture-capital funds. See Nature Biotechnology, May 2013.