Healthcare Costs Sap Biotech VC
17/11/11 15:12 Filed in: GenomeWeb Daily Scan
Submitted by S. Pelech - Kinexus on Thu, 11/17/2011 - 15:12.
Investing in seed and early-stage biotechnology companies is not for the faint of heart, and the return has been quite disappointing for high net worth investors and venture capitalists. This is one of the reasons that RBC disavowed itself over 6 years ago from equity investment in biotech companies with the dismantling of Milestone Medica and the RBC Capital Partner's Life Sciences Division. There is no doubt that many of the over 6000 biotech ventures world-wide have questionable prospects that is independent of their financial requirements. Many early investors in the past were still able to make money with their biotech investments when IPO's were in the vogue, but this really has not been much of an option in the last decade. High financing requirements, long product development times, high product failure rates, and poor investment liquidity prospects are only some of the impediments to biotechnology investment.
With the advent of recombinant DNA methodology, the biotech industry has matured over the last 30 years and has endured a couple of cycles of increasing and waning investor interest. Indeed in recent years, much fanfare and media buzz has lured investors to benign diversionary opportunities such as telecommunications and entertainment as well as to those activities that can be very destructive to human welfare and the environment such as the oil, gas and mining industries. Nevertheless, the health, food, security and other welfare problems that the biotech industry are confronting are only becoming more critical over time as our population continues to explode. In view of this need, I remain optimistic about the prospects of the biotech industry and its workers in the long run, although I remain concerned about the health of the planet as a whole.
Link to the original blog post.
Investing in seed and early-stage biotechnology companies is not for the faint of heart, and the return has been quite disappointing for high net worth investors and venture capitalists. This is one of the reasons that RBC disavowed itself over 6 years ago from equity investment in biotech companies with the dismantling of Milestone Medica and the RBC Capital Partner's Life Sciences Division. There is no doubt that many of the over 6000 biotech ventures world-wide have questionable prospects that is independent of their financial requirements. Many early investors in the past were still able to make money with their biotech investments when IPO's were in the vogue, but this really has not been much of an option in the last decade. High financing requirements, long product development times, high product failure rates, and poor investment liquidity prospects are only some of the impediments to biotechnology investment.
With the advent of recombinant DNA methodology, the biotech industry has matured over the last 30 years and has endured a couple of cycles of increasing and waning investor interest. Indeed in recent years, much fanfare and media buzz has lured investors to benign diversionary opportunities such as telecommunications and entertainment as well as to those activities that can be very destructive to human welfare and the environment such as the oil, gas and mining industries. Nevertheless, the health, food, security and other welfare problems that the biotech industry are confronting are only becoming more critical over time as our population continues to explode. In view of this need, I remain optimistic about the prospects of the biotech industry and its workers in the long run, although I remain concerned about the health of the planet as a whole.
Link to the original blog post.