The biotech sector is currently in the most successful period in its history based on valuation metrics, amount of money raised and number of IPOs. The perception around the current situation ranges from very bearish (it’s a bubble) to very bullish (there’s enough innovation to fuel future growth).

Before providing my take (which is very subjective and is as good as anybody else’s for that matter), there are two things most investors agree on:

1 – The biopharma industry enjoyed a massive wave of innovation in the form of revolutionary drugs that truly make a difference for patients. These include PD-1 antibodies, curative HCV drugs and PCSK9 antibodies just to name a few. Fundamentally, our understanding around diseases and our abilities to modulate them has never been better, which should dramatically increase success rates in the long run.

2 – The biotech sector has had a huge run in the past ~3 years. Since the beginning of 2012, the primary biotech indices on NASDAQ and NYSE are up 250%-260%. This means that in 3.5 years, the biotech industry (which was already quite established at the time) saw its valuation more than triple.  Continue reading →