When Juno Therapeutics first approached investors with plans for an IPO, the year-old biotech was thinking of selling shares at $16 to $18 a share. The biotech ($JUNO) wound up going public at $38 and this morning the share price is $51.
Spark Therapeutics ($ONCE) set its range at $15 to $17 a few weeks ago, priced its IPO at $23, saw the price double on its debut and now sits on a share price of $60 this morning.
AbbVie's ($ABBV) jaw-dropping price of $21 billion for Pharmacyclics ($PCYC)--based on a speculative projection of enormous peak sales for Imbruvica--generated a frenzy of discussion about the next biotech that would fall to the M&A mania now gripping the industry. Share prices rose.
You could go on with plenty of additional examples. But the bottom line here is that some of these values being placed on biotech assets have stretched so high as investors barreled in to take advantage of a huge wave of new listings that some people are wondering the obvious: Is this a bubble?
Carole Nuechterlein, head of the Roche Venture Fund, at a recent conference (and quoted by Bloomberg) had this to say about Spark: "My initial reaction wasn't, 'Wow, this is great. It was more, 'The end is coming.'"
The general stats on the biotech index are well known these days. The Nasdaq Biotechnology Index jumped more than a third last year, setting the stage for a dizzying burst of enthusiasm at the annual JP Morgan confab in San Francisco.
For most, that was a mood worth celebrating. But you could also detect a note of caution in the air. "I have my seatbelt and crash helmet on," one anonymous CEO told The New York Times' scribe Andrew Pollack at the event.
In part, some of the online speculation about a bubble revolves around the discovery of the obvious: Drug development is incredibly risky (insert figures from Tufts here) and many of these companies don't have any products, just pipelines.
So we here at Fierce are turning to the industry to get your opinion. Please click below to register your vote on a sustainable bull market in biotech vs. a bubble. And we'd like to hear your thoughts on the subject. Final results will be revealed on Monday.