The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Beware of biotech

Even after the dot com bubble burst, US investors continued to snap up the IPOs of another group of companies characterized by non-existent profits and total dependence on unproven new technology. Now many investors are regretting their enthusiasm for healthcare and biotech stocks.

Pablo Halpern, vice-president of
Given Imaging, displays its
ingestible cameras

Is there a dot com-style bubble in the making for biotechnology companies? Some would say no. Valuations are way down from the heady days of the tech and internet boom and these companies are run by serious scientists more mature than the twenty-something would-be millionaires who set up all those now-defunct dot coms.

However, judging by recent volatile stock price movements and the financials of some of those companies looking to raise equity capital this year, it's not such a stupid question. Even some of the bankers on syndicate desks are starting to wonder about what they are selling. "Why would anyone buy these companies," says one equity syndicate banker, leafing through a selection of prospectuses for biotech companies. "They've little or no revenues, one big idea, and large operating losses. Are we going to do what we did in the tech boom and just pass them on to retail?"

There have been several cases already this year highlighting the pitfalls of investing in these small biotechs.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree