Biotech Investing

It’s good for biotech investors to know where promising biotech stocks are operating. Here’s an overview.

For those interested in biotech investing, it’s helpful to be aware of key industry trends. However, it’s also good to have an understanding of where promising biotech stocks are operating.
Fortunately, the best regions in the US for biotech companies have been identified by PwC and the National Venture Capital Association, based on data from Thomson Reuters (TSX:TRI,NYSE:TRI).

According to the report, Boston, the San Francisco Bay Area, San Diego Metro Region, Great Lakes and New York Metropolitan region are the places that received the most life science venture capital dollars in the first half of 2016.

Boston: an innovative hub

In August 2014, Greg Vlahos, life sciences partner at PwC, reported that “the largest life sciences deal of the quarter—the $200 million investment in Boston-based biotechnology Intarcia Therapeutics—is the single largest deal for Boston across all industries in almost 20 years.”

In Q4 2014, that record was broken by a $466-million investment in Moderna Therapeutics. For Vlahos, “this cements Boston’s position as a leading center of innovation in biotechnology.”

Indeed, Boston still tops the list of best US regions for biotech stocks. In the first half of 2016, 62 deals were closed in Boston, each averaging $23 million. In total, Boston biotech received $1.3 billion in venture capital for this time period.

GEN News also reports that in 2015, Boston was number one for NIH funding, receiving $519 million from some 981 awards. That same year, Boston Pharmaceuticals raised a record-breaking biotech seed investment—it received 600 million in funding, according to this report from EY.

San Francisco Bay Area: Region of productivity

The San Francisco Bay Area (which includes San Francisco, Berkeley and San Jose) follows Boston as the best US region for promising biotech stocks, based on data from the first half of 2016. The region received 1.2 billion in biotech venture funding during that time.
The year before, companies in the region raised 6.5 billion through 142 deals. 3.4 billion of that came through venture capital and IPO investment.

The San Francisco Bay Area also hosted the BIO International Convention this year, which indicates its growing reputation as a hub for biotech innovation. Indeed, in 2015, it produced close to 10, 000 patents.

Other top regions

The Great Lakes, San Diego Metro and New York metro areas round out the top US regions for promising biotech stocks.
The San Diego metropolitan area saw around $400 million in biotech deals during the first two quarters of 2016, and took third spot in Pwc’s list of top biotech regions. Part of that came from one single financing: Human Longevity pulled in 220 million.
San Diego was followed by the Great Lakes region and the New York metro area. Companies in these two regions also raised significant capital in the first half of 2016.

National view

The US biotech industry had a strong run for several years, with record-breaking highs in 2014 and 2015. It continues to attract the vast majority of global financing—82 percent in 2015.

The sector was more volatile in recent months and saw some major losses. But while biotech stocks had a tumultuous past year, the sector seems to be ending 2016 on an upswing, following the results of the presidential election. Time will tell whether that trend can continue.

 This is an updated version of an article originally published on Life Science Investing News on May 13, 2015.
Don’t forget to follow us @INN_LifeScience for real-time news updates.

Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.

Related reading: 

What Is Biotech Investing?



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