Large pools of capital are flowing into biotech funds and companies as a flurry of European biotech seek access to New York’s Nasdaq in a frantic race to get in on the action. With a COVID-19 rush for vaccines and therapies, the Nasdaq biotech index <.NBI> peaks about 25% in the second calendar quarter, the best run in a couple decades hitting a valuation of $1.2 trillion. Bankers report UK and Euro midsized biotech are talking with New York investors about listings there. While investors in Spain want profits today, Nasdaq investors want large returns in the future.
Follow the ‘Yellow Brick Road’ to Nasdaq
Since COVID-19, the economic contagion spreading across America and the world has dark implications. But a sliver of intense bright light shines on biotech corridors around the world, especially in the United States, as they seek capital. And investors are following the Yellow Brick Road to New York—at least the Nasdaq as the appetite for initial public offerings is far more significant than other sectors “where the pandemic has sapped interest in new issues,” reports WTVBAM. That global IPO volumes are at all time lows according to Refinitiv data hammers home this point.
The Nexus for Drug Development Capital
But not for biotech as Euro firms such as Pharma Mar (Spain) consider a listing on New York’s Nasdaq market. The cancer medication developer has produced some positive results (but a small sample), and the outlook is bullish. Chairman Jose Maria Fernandez Sousa-Faro conveyed to Reuters his upbeat outlook. And the company’s shares have nearly tripled since the advent of COVID-19. Euro firms seek access as Mr. Fernandez Sousa-Faro commented, “There is a sophisticated pharma investor base on Nasdaq that goes beyond anything here in Europe at the moment, and the sector is red hot.”
Pharma Mar needs to tap into investors that get biotech; that understand the risk and the value-chain above and beyond profits, which is what Spanish investors are looking for this moment. Well, that disqualifies most biotech. Pharma Mar may actually acquire a rival in America, which could make it easier to ease right into the Nasdaq listing.
Other Nasdaq Examples
Other biotech on the Nasdaq include COVID-19 vaccine developers, such as Moderna, Novavax and Inovio Pharmaceuticals. German-based CureVac will plan an IPO on the Nasdaq next fund to pull in American investor dollars to drive its vaccine. President Trump met with the German group to try to cut a deal; the Germans passed and are now opting for access to the vast American capital markets.