The downturn that halted a record run of biotech IPOs has now lasted more than a year and a half. New offerings plummeted by about 80% last year, to 22 overall, and are on pace to fall further in 2023 as investors demand more evidence of progress from young biotechs than previously.
The slowdown has pressured privately held biotech startups, which rely on access to the public markets for funding and returns for their venture backers. In this tougher market climate, companies are staying private for longer and raising additional private rounds. A sector overview published this week by the consultancy Ernst & Young found that investors are more likely to turn to surer bets, presenting challenges for startups pursuing unproven drugmaking approaches.
