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The Readout

The haves and have-nots of biotech IPOs

As biotech’s unprecedentedly open IPO window wraps up its sixth year, one fact tends to escape attention: Most of these things are bad investments.

Analysts at Leerink crunched the numbers on the IPO boom and found that while the average return of biotech debutantes is positive, the best-performing 20 percent of companies account for more than 80 percent of investor benefit. Meanwhile, a full 60 percent of biotech IPOs since 2013 have served up negative returns.

That means, essentially, that the story of the biotech boom is one of a few overachieving students goosing the numbers for a C-minus class. And yet it’s easy to see why investors keep coming back to the trough: A big bet on one of the 20-percenters would more than make up for a few miscalculations on also-ran drug developers.

Meet the Wunderkinds

Each year at STAT, we set out to look past the household names of science and spotlight the next generation of researchers at work on what could be the next big thing in medicine. 

Over the past several months, we pored through hundreds of nominations from across North America. We didn’t set an age limit; we were on the hunt for the most impressive doctors and researchers on the cusp of launching their careers but not yet fully independent. Most were postdocs, fellows, and biopharma employees working with more senior scientists. All are blazing new trails as they attempt to answer some of the biggest questions in science and medicine.

And now we present them to you. Read more.

Biotech is just swimming in money right now

Last week, public market investors poured about $1.3 billion into biotech, according to analysts at Piper Jaffray, marking the biggest jump in more than a year. Here’s why that matters: The flow of money into the sector is strongly correlated with its performance, and the past few months of investor interest in biotech reverses two years of negative trends.

In 2016, roughly $6.5 billion left the sector, and the following year was just about flat. This year has already seen more than $4 billion flow into biotech, rivaling the heady years of the industry’s recent boom.

There are a few likely explanations. For one, the headwinds that sent biotech tanking in 2015 — concerns about a drug pricing crackdown and uncertainty about the 2016 presidential election — have largely been resolved. And for two, in the minds of generalist investors, the upward trajectory of biotech and health care at large has come to look more attractive compared with the once reliable but suddenly volatile tech sector.

A win for prenatal CRISPR

In an early-stage study on mice, scientists managed to cure an inherited disease by using CRISPR genome editing on fetuses, a promising sign that the rapidly proliferating technology may offer hope for devastating inborn disorders.

As STAT’s Sharon Begley reports, researchers at the University of Pennsylvania and the Children’s Hospital of Philadelphia managed to cure a disease called hereditary tyrosinemia type 1 in mice by disabling an errant gene, an early victory that could pave the way to curing genetic disorders before birth.

“A lot more animal work needs to be done before we can even think about applying this clinically,” said Dr. William Peranteau, who co-led the study. “But I think fetal genome editing may be where fetal surgery once was, and that one day we’ll use it to treat diseases that cause significant morbidity and mortality.”

Read more.

More reads

  • Questions about funding and purpose loom over a foundation Congress created to help the FDA. (STAT)
  • GlaxoSmithKline helps immunometabolism startup Sitryx to $30 million round. (FierceBiotech)
  • Three biotech companies are expected to go public this week. (Business Insider)

Thanks for reading! Until tomorrow,


Tuesday, October 9, 2018


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