That IPO boom was just what the VC doctor ordered. Between high-priced buyout deals and new offerings, the venture funds got the exits they needed to look good to investors and bring in fresh funds. This week we saw OrbiMed, a global player, close its $950 million fund, following Sofinnova Partners' $324 million play in Paris. And it's no surprise that they blth unveiled record sums, which we've been seeing for the past two years.
The big shakeout following the 2008 crisis left fewer VCs in the game, but the survivors are admirably staffed by longtime pros with great connections and a yen for new technology. As a result, VCs like Atlas, Flagship and others have been turning out new biotechs at a record pace.
This trend has in turn helped inspire some of the big names in biopharma R&D--Briggs Morrison at AstraZeneca ($AZN), Doug Williams from Biogen ($BIIB), JC Gutierrez-Ramos at Pfizer ($PFE)--to jump ship and helm their own ventures. And other experienced biotech execs who earned buyouts are back for new plays.
As a side note to this trend, the big leap in VCs in the U.S. will play out to the advantage of the UK's Golden Triangle and other global hubs. More transatlantic players like NEA are on the move, and that means more startup cash for the potential game-changers out there.
The IPO chill can come as no great surprise to the VCs. Nothing lasts forever, especially booms. Now's the time to build new biotechs and get ready for the next big breakthroughs that can be bought up by Big Pharma. It may not be a perfect world for now, but it's good enough to keep everyone excited. And that's the main thing. -- John Carroll