Biopharma Investors Aren’t Running for the Hills


Companies that help fund biopharma startups worry about what’s to come under the Trump administration, but their concerns are not as deep as in other business sectors.

Bloomberg Technologies reported last week that venture capital firms that invest in tech companies indicated a 37 percent drop in the last three months in startup dealmaking was due at least in part to uncertainty about priorities in the new Trump administration.

I cover legal decisions, legislation and regulations that affect biopharmaceutical companies. I decided to see if the biopharma industry has the same feeling about startup funding as the people over in tech. This is important because large pharmaceutical companies (Big Pharmas) have looked to biotechnology startups for innovations in drug development. Biopharma startups usually don’t have the product yet and so lack income. But they do have ideas that, with funding, can lead to patents and new drugs.

Venture capital executives whose firms fund biopharma startups told me that changes in administration always create uncertainty. “There may be a slowdown in new biopharma investment as people are trying to figure out what President Trump wants to prioritize,” Caleb Winder, managing director of Excel Ventures Management, told me. “But deals are being made, and things feel better than they did a year ago.”

An analysis of Bloomberg Finance data shows VC funds raised $2.4 billion for biopharmas over the last six months compared to $1 billion in the prior six months. There was a big jump in VC fundraising in October 2016, a strong December and slight declines from those levels in January and February.

David Berry, a general partner at Flagship Pioneering, told me, “As far as day-to-day is concerned, nothing has happened yet to negatively impact biopharma investment decisions. For therapeutics, there's no sign that it's going to get any harder for investments. In fact, conversations are going on that could take us into interesting places.”

Quarterly reports on VC investment will be out next month, and there will likely be up and downs throughout the year, which Bloomberg BNA will cover. The feeling about biopharma VC investment right now, however, is good.

You can read my full article here.

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