AS INVESTORS and executives crammed into a New York ballroom for a conference held this week by the Biotechnology Industry Organisation, the mood was jittery.
The previous week eight biotech firms had launched initial public offerings in America, together raising more than $500m. In a discussion panel on whether the industry’s latest boom will last, a prominent investor, Oleg Nodelman, joked that he still had suitcases of cash for any firm that wanted it.
Biotechnology is the creation of drugs and other useful products by making use of “nature’s toolkit”–that is, by adapting or exploiting processes found in living organisms. For example, Argos Therapeutics, one of the latest batch of firms to raise money, is working on ways to trigger patients’ own immune systems to fight kidney cancer or HIV infection.
The industry has undergone cycles of boom and bust since its inception in the 1970s, pioneered by firms such as Genentech. (We review a new book about Vertex, another early entrant, “The pharmaceutical industry: When the times were a-changing”.) As the chart shows, last year more biotech firms joined American stockmarkets, raising more money, than at any time since the golden year of 2000. In the past 12 months, even as the S&P 500 share index has risen by 20%, shares in biotech firms have surged by almost three times as much.