Biotechnology companies have been going public in record numbers, and many of them have been immediately embraced by public-market investors once their stock starts trading.
But does that mean the sector is in a bubble?
The chief executives of two venture-backed companies that went public spoke at the National Venture Capital Association’s annual conference in San Francisco. They said the good days for drug-developers will likely last for a long time, as their success is built on much more than simply what is trendy among consumers right now.
“There are [patients] that are supposed to be dead, and they are not dead. Patients are living longer, and that’s infectious,” said Nick Leschly, chief executive of gene-therapy developer Bluebird Bio Inc.
Mr. Leschly was joined onstage at the conference by David Schenkein, chief executive of cancer therapeutics company Agios Pharmaceuticals Inc.
Messrs. Leschly and Schenkein said the surge of biotech IPOs and the rise in the stock of many of those companies doesn’t mean the sector is in a bubble.
What once seemed like science fiction–for example, using a virus to deliver new genes to a patient’s body–is now reality, and investors want to be part of it every bit as much as dangerously sick patients do.
“A decade ago, stuff just didn’t get to market,” Mr. Schenkein said. “In the 2000s, most drugs failed because they didn’t work. But the science has changed dramatically.”
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