By Max Klietmann, VP of Marketing, LSN
The European early stage biotech sector has suffered from a dearth of capital in recent years. This is largely due to a combination of economic uncertainty and a lack of European-based investors targeting riskier early stage opportunities. However, as the biotech sector continues to be a top performer in public markets, with heavy IPO and M&A activity, US investors are increasingly setting their sights on European opportunities.
According to LSN research, private biotechs raised slightly over $1 billion in direct investment through the second quarter of 2012. This is almost a 200% increase relative to the preceeding three months. European biotechs account for close to 45% of this capital. As interest from emerging investor categories outside of the VC realm begin to investigate opportunities in Europe, this trend is likely to accelerate and give many leading clusters in the United States strong competition in terms of advancing innovation to market.
So what are the implications? First and foremost, it signals investor competition for pre-market assets. This is good for the industry at large, because it means that private capital is coming back into the space after an extended dry period, giving many “valley of death” assets some more hope. Secondly, it signals a rebound for the European biotech sector. This means jobs and value-creation, but also signals a wealth of new opportunities for CROs and service providers seeking to expand their client base. Finally, it means more competition among products, and better patient outcomes on a global basis.
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