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Topic Name: Biotech Investment Barometer Reveals Continued Confidence in Sector
Category: Bioelectronics
Research persons: Dr. Ing. Peter H. Reinisch
Location: GLSV GmbH, Von-der-Tann-Str. 3, D - 80539 München, Germany
Details
Global Life Science Ventures (GLSV)
today released the results of its 3rd Annual GLSV
Biotech Investment Barometer.
The survey of the biotech and investment communities revealed that the sector
continues to be viewed positively by a large majority of participants, although
the level of optimism is slightly lower compared with last year. The results are
being presented at Sachs Associates' Biotech in Europe Investment Forum, held in
Zurich on 2-3 October 2007.
Among the 200 respondents to the survey, carried out in mid-September, 79%
were based in Europe, with the remainder mainly in North America. Biotech
executives and members of the investment community represented 40% and 50% of
participants, respectively. The following are key results and conclusions from
the survey.
Continued positive outlook
The overall outlook for the biotech sector remains clearly optimistic, though
somewhat less so than last year. 68% of European respondents see the future of
the European biotech sector as fairly or highly positive, down from 75% in 2006.
19% see it as negative, an increase from 9% in 2006. The 42% of European
respondents who say they are more optimistic than 12 months ago is down from the
59% who gave the same response in 2006, with 29% now more pessimistic.
Impact of recent clinical results and drug approvals
A factor in the tempered optimism is recent clinical results and drug
approvals, which are seen by 34% of European participants as having a negative
impact on market sentiment, whereas only 20% see a positive impact.
Improved relationship between big pharma and biotech
The symbiotic relationship between pharma and biotech is of great importance
to the biotech sector, and big pharma's attitude toward biotech companies is
considered by 80% of European respondents to have improved in recent years. 69%
also consider that big pharma has made more effective use of biotech's
innovations to fill its pipelines in recent years.
Slight improvement in early-stage funding environment
There is a positive shift in the perception of the funding environment for
early-stage biotech companies in Europe. While still viewed as difficult or very
difficult by 62% of European respondents, this number is down from 74% last
year, while fully 23% view it as good or excellent, up from 13% last year.
The US funding environment is again considered good or excellent by 45% of
European respondents (42% last year), while only 18% consider it difficult or
very difficult. North American respondents were, however, much more likely to
view their own funding environment as difficult.
IPO market conditions similar in Europe and US
Europe and the US are now considered to have similar market conditions for
IPOs, with respondents split approximately equally among those saying the
conditions are still more favourable in Europe, about the same, and less
favourable in Europe.
The two most important factors for the success of an IPO were considered to
be a late stage product and a strong management team. Investors tended to place
at least as great importance on the strength of the management team (34% ranked
first) as a product in Phase III (28% ranked first). On the other hand, 50% of
biotech executives viewed a product in Phase III as the most important factor,
with only 15% viewing the strength of the management team as the number one
factor. The number of products in the pipeline came third in the ranking,
followed closely by the size of the therapeutic market.
Biotech stocks considered undervalued; good performance expected
European biotech stocks are still considered to be undervalued by 63% of
European respondents (68% in 2006), despite performing well in the past year.
Biotech executives are more likely by a 10% margin to consider them undervalued
than the investment community. North American respondents were, on the other
hand, more likely to view European biotech stocks as overvalued (42%).
There is a greater tendency since last year to view US biotech stocks as
undervalued (34% vs 29% last year among European respondents), with fewer
viewing the stocks as overvalued (21% vs 29% last year).
49% of European respondents expect biotech shares to outperform the stock
market in the next 12 months, while only 22% expect them to underperform.
Biotech executives and investors had similar views.
Mixed views on attractiveness of US vs Europe
Respondents were split between 48% who view the US as a more attractive
region for life science VCs and 48% who consider the US and Europe equally
attractive or Europe more attractive. The investment community was more likely
than biotech executives to consider Europe as more attractive than the US (18%
vs 7%).
Dr. Peter Reinisch, Partner at GLSV, commented, "The results show that the
European biotech sector is maturing and continues to be viewed positively by a
large majority of respondents, despite some difficulties with clinical trials
and drug approvals. With all the fundamentals in place, the sector will continue
to grow and fulfill its expectations as the source of innovative new drugs for
the pharma industry's pipeline."
The full presentation with the Barometer results is available on the GLSV
website at www.glsv-vc.com in the section
"Download Area".
About Researcher:
Dr. Ing. Peter H. Reinisch, Partner
Dr. Reinisch has over 14 years experience in the life science industry that
included senior management positions in the Corange group (Boehringer Mannheim
and DePuy) for 11 years. He was responsible for the strategic coordination and
business development of the diagnostics business worldwide. From 1994 to 1996 he
advised Boehringer Mannheim and Corange, including from 1995 on the setting up
of GLS I. He has acted as a board member, or attendee, with a number of
portfolio companies, five of which are already public - four by IPO, one by
reverse take-over. In addition, another company recently exited through a trade
sale. He has been advising GLS I and GLSV II since the beginning in 1996 and is
Managing Director of the advisory company based in Zug/Switzerland.
Prior to Corange/Boehringer Mannheim, Dr. Reinisch held positions of
increasing responsibility with Brown Boveri, the Institute for Automation, the
Denner Group and McKinsey and Co., where he concentrated on high technology
industries. He became CEO of Pfister, one of his clients.
Dr. Reinisch, born in 1940, first studied mechanical engineering, then
graduated summa cum laude with a doctorate in Business Administration ("Betriebswissenschaften")
from the Technical University of Vienna.
About Global Life Science Ventures
GLSV is a leading, independent venture capital fund focusing exclusively on
the life sciences. With offices in Switzerland and Germany, GLSV is dedicated to
supporting early-stage companies originating from universities, scientific
institutions or industry, but also invests in selected later-stage companies,
including buy-outs. The group currently advises and manages funds totaling more
than EUR 200 million. GLSV has now financed 34 innovative life science companies
throughout Europe and the USA, thirteen of which have completed an exit through
IPO, trade sale or M&A. Since 1996, GLSV has built up a broadly diversified
portfolio of companies in pharmaceuticals, diagnostics, medical devices, and
biotechnology.
Industry-born team - Proven track
record - Global perspective
Germany
Switzerland
GLSV GmbH
GLSV AG
Von-der-Tann-Str. 3
Postplatz 1, P.O. 626
D - 80539 München
CH - 6301 Zug
Tel. +49 (0)89 288 151 0
Tel. +41 (0)41 727 19 40
Fax +49 (0)89 288 151 30
Fax +41 (0)41 727 19 45
www.glsv-vc.com
mailbox@glsv-vc.com
For additional information, please
contact:
Rochat & Partners
MC Services (Germany)
Jonathan Leighton or Christophe Lamps Stefan Riedel
Tel. +41 22 786 54 55
Tel. +49 (0) 89 210 228 40
Fax +41 22 786 54 58
Fax +49 (0) 89 210 228 88
E-mail: jleighton@rochat-pr.ch
E-mail: stefan.riedel@mc-services.eu
clamps@rochat-pr.ch
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