07 Mar 2004 a banner year for biotech financing
Burrill & Company does a great job of tracking U.S. biotech financing in all its shapes and forms (including funds flowing through due to partnerships with other biotech companies and Big Pharma). From its recent analysis, it would appear that 2004 was a very good year for biotech in almost all the financing categories. Let’s take a look:
If 2003 was a great year with $25.3 billion flowing into the biotech sector from a variety of different sources, 2004 topped this with a number of $31 billion (up 23 percent).
Partnering funding grew 22 percent from $8.9 billion to a robust $10.9 billion. VC funding was up 31 percent from $2.8 billion to $3.7 billion. IPO funding almost tripled for the year from $0.5 billion to $1.8 billion. In vogue over the last few years from taking advantage of low interest rates, debt financing was up 17 percent from $7.2 billion to $8.4 billion.
A big question for 2005 is: Will the IPO market continue?
There are still a lot of companies looking for the liquidity of the public markets. While very exciting, last year’s IPO market weakened in the second half of the year and fell short of the 50 companies that Burrill predicted would go public from the fourth quarter of 2003 through the end of last year. There are a number of IPOs that have been filed this year in addition to pending ones from last year.
The only disappointing segments were follow-on offerings. These fell 4 percent from a spectacular 2003 level of $3.5 billion. Also, the “other” category fell 9 percent from a very low base. It will be interesting to how financings proceed in 2005 as a number of VCs have refilled on capital. See you next week!
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