The Axovant IPO Saga
How what would seem completely improbable and surreal in any other industry becomes reality in the 2015 world of biotechnology investing on Wall Street.
How does a 29 year old hedge fund analyst, with no previous executive experience or history of leading drug research and development, manage to purchase for $5 million a drug developed and later abandoned for showing poor prospects by a pharma giant, and list the venture with no revenues and less than 10 employees less than 6 months later in an IPO on the New York Stock Exchange raising $300 million at a valuation close to $1.6 billion? I don’t know?…
I find the Axovant story to be fascinating and a perfect illustration of the excesses and potential misallocation of capital that can be witnessed in the current biotechnology investment environment.
The sheer amount of dollar chasing biotechnology assets in the private and the public markets hoping to replicate the performance of the past 5 years is such that almost any biotechnolgy related venture, including the most preposterous and far fetched, can be financed, and financed at very high valuations.
Risky development stage biotechnology ventures with no revenues have gone from the private VC market where they used to be valued for $10's of million or from public market valuations of a few $100's million in some cases, to now being pushed onto the public markets with multi billion dollar valuations on the back of Wall Street analysts narratives and special biotech analyst math multiple of supposed peak sales of a not yet existent product often 10 years away. Axovant is the poster child for this.
I will compile here some of the thoughts and observations regarding Axovant I have posted along the way, will update as the saga continues .
