Funding for European biotechs is reported to be surging. In the...

Funding for European biotechs is reported to be surging. In the first half of 2018, US$3.9bn was raised via venture capital investment, IPOs and follow-on offerings for listed biotechs, up from US$2.3 bn in H1 2017 and US$1.7 bn in H1 2016. US investors are reported to be the source of most of the capital inflow.

History shows that the ability of biotechs to access capital impacts pharma M & A and licensing deal values. Put simply, when biotechs have more funding options, it is less easy for pharma to engage in cherry-pick and squeeze tactics.

To give a more detailed picture of what I mean by cherry-pick and squeeze tactics, I went back through my files to dig out an early 2011 interview with Avalon Venture Capital founder, Kevin Kinsella, where he talked about the “egregious” and “hardball mercenary business tactics” of pharma, which he compared to predatory overfishing. He argued that, in the longer term, the predatory behaviour towards biotechs would be to the detriment of big pharma and that society would have to bear the brunt of their greed "by having a paucity of innovative therapeutic products for medicine".

Happily, 2018 is a better time for biotech than 2011. The current healthy flow of capital into biotechs in both the United States and Europe bodes well for pharma deal values and hence bodes well for Neuren. Nonetheless, I’d urge anyone who associates pharma with words like “honour” or “easy cash” to read the interview with Kinsella (second link below).

http://www.bioworld.com/content/european-biotech-course-record-year-39b-raised-first-half-2018-0

https://www.xconomy.com/san-diego/2...most-to-point-of-extinction/?single_page=true