Making the biotech IPO work

The past decade has been a difficult time for biotech companies trying to access public markets. As capital markets became more restricted, investors became less willing to invest in companies that were focused on preclinical science, as opposed to products in late stage clinical development. In fact, of the 28 biotech companies focused on therapeutic products that completed IPOs between 2011 and the Q1/2013, 25 had at least one product in phase 2 or beyond, and 16 had at least one product as far as phase 3, including 3 with products on the market. In doing so, investors eschewed investments in translational science that have traditionally been the mainstay of the biotechnology enterprise. What does this mean for investors and for the biotech industry?