Covid is making biotech companies a hot new tech sector as investor demand drives record IPOs.


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The ongoing Covid-19 pandemic has made biotech companies a hot new tech sector as investor demand facilitates record IPOs, a panel of top investors told CNBC on Wednesday.

The biotechnology sector has received a lot of attention in the last two years of the pandemic. This is mainly due to “the creation of literally all the life-saving drugs, vaccines and remedies that have just saved the world.” MPM Capital, a private portfolio manager at Christiana Bardon Equity Company, told CNBC’s Megtilel at the “Delivering Alpha” conference.

For example, Pfizer and Moderna’s highly successful Covid vaccine uses messenger RNA or mRNA technology that has been developed in the United States at record speed and has never been approved for human use. According to the Centers for Disease Control and Prevention, there are over 370 million doses in the United States.

“We think, as you know, we’ve always been seen as a little less interesting than our techs,” Birdon said. “But to be honest, we’ve been doing the same work for cancer and all other unmet medical needs for 20 years, since the era of modern biotechnology began with the revolution in human genome sequencing. I did. “

She said the growing interest in new technologies during the pandemic has driven a lot of capital into the industry, facilitating record funding and IPOs.

The iShares Biotechnology ETF, which tracks the biggest players in the biotech industry, has jumped by around 62% in the past two years, outperforming the performance of the S&P 500, which jumped by around 47 % during the same period.

Alex Denner, founding partner and chief investment officer of Sarissa Capital Management, said investors were pouring “huge” amounts into the industry in anticipation of industry developments after the pandemic ended. ..

“A lot of people are very excited to accelerate drug development much faster than thought a few years ago,” he said.

He said the growing interest has made it “ridiculously” difficult for some companies to find qualified researchers with lab space and clinical development experience.

“I think you’ll see this overheating, but with a little bit of integration and buying, you have a lot of opportunities to get into it,” he added.

Mr Burdon said he hopes areas such as cancer research could benefit.

“We can not only understand the mutations that cause cancer in humans, but we can also develop drugs specifically for these mutations,” she said. “It also means that clinical trials can be more efficient because we only identify patients who are not mutated during the clinical trial process.”

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