5 reasons for investor optimism

BIO’s David Thomas spoke at BIO-Europe Spring in Barcelona last week and gave us five reasons why investors are optimistic. Plus, on International Day of Zero Waste, we look at how biotech is making an impact. (620 words, 3 minutes, 6 seconds)

5 reasons for investor optimism at BIO-Europe Spring 2024

Speaking at BIO-Europe Spring in Barcelona last week, David Thomas, BIO’s SVP of Industry Research, explained why investors are much more optimistic than last year.

How we got here: One year ago, sentiment was extremely low due to a combination of potential new lows for biotech stock indices, VC and licensing trending downward, and the newly passed Inflation Reduction Act (IRA).

Now, we’re seeing positive signals all around, from biotech stock indices to IPO capital raised and post-IPO performance, and more, Thomas said in his opening remarks at BIO-Europe Spring 2024.

He lists five reasons for this optimism:

1. Record FDA approvals: These totaled 64 last year, with 65% originating in small companies and a record number of biologics approvals (including two historic in vivo gene therapies). “This demonstrates the promise and importance of biotechs in the drug industry ecosystem,” he says, along with renewed excitement about genetic medicines.

2. Record acquisitions: 2023 saw records in R&D-stage acquisitions ($78B) and emerging biotechs worth at least $10M (48)—and they weren’t only focused on cancer and rare disease but also included two central nervous system acquisitions.

3. Obesity drugs: Just last week, the first drug was approved for MASH, and analyst estimates place the obesity drug market north of $100B in 2030 from just $3 billion a few years ago. “There are not too many other industries where the addressable market can change that dramatically in such a short time,” notes Thomas.

4. AI for drug creation: AI is driving all-time highs in the broader stock markets, and we’re seeing a record number of AI drug discovery deals with tech giants and AI biotechs. The first drug created by Generative AI reached Phase II clinical trials. Watch this space.

5. Policy progress: Although the IRA continues to cast a shadow over the industry, proposed fixes to the orphan drug and small molecule provisions are gaining traction, as are a reversal of R&D amortization accounting rules, and exemptions from onerous SEC reporting requirements for small companies.

Read the whole thing in Bio.News.

Learn more: The BIO International Convention in San Diego is just 10 weeks away—we hope you’ll join us to learn more about exciting industry developments and the positive impact on patients. Visit convention.bio.org to register and learn more.

More Health News:

The New York Times: Biden administration finalizes rule curbing use of short-term health plans
“The plans, often with lower premiums than those found on the Affordable Care Act’s marketplaces, do not have to cover people with pre-existing conditions. They are also free from the health law’s requirement that plans offer a minimum set of benefits, like prescription drug coverage and maternity care.”

How biotech is combating waste

It’s the second-annual International Day of Zero Waste—and biotech’s on the case.

Why it matters: “Every year, humanity generates between 2.1 billion and 2.3 billion tonnes of municipal solid waste,” says the UN. “Without urgent action, annual municipal solid waste generation will hit 3.8 billion tonnes by 2050.” 

Here are just a few biotech solutions:

• With gene editing, we’re developing solutions to reduce food waste like potatoes, mushrooms, and strawberries with a longer shelf life.
• Turning discarded fabrics and seaweed and other plants into biobased clothing to reduce textile waste.
• Making low-carbon sustainable aviation fuel from agricultural waste, municipal solid waste, energy crops, or captured carbon—reducing both waste that already exists as well as future carbon emissions.
• Advancing bioplastics that can be “drop-in” replacements for traditional plastics—but are biodegradable or compostable.

Learn more: Biotech is helping to advance all of the UN Sustainable Development Goals, says a recent report from BIO and the International Council of Biotechnology Associations (ICBA). 

President Biden’s Friday: After a busy week of campaigning, heading to Camp David for the weekend.

What’s Happening on Capitol Hill: Enjoy the Easter weekend.