Ahead of the BIO Investor Forum in San Francisco on October 7-8, Ron Leuty of the San Francisco Business Times interviewed Jim Greenwood, BIO’s CEO and president, about his view of the industry — and how its current financial status is not a “biotech bubble”:
“(Leuty) You talked about the uptick in IPOs. That’s brought a lot of generalist investment dollars — one person I talked to called them “sheeple” — and that’s a double-edged sword, isn’t it?
(Greenwood) The generalists always add a little extra momentum going up and going down because they’re following the specialists. It’s sort of a little lag time between the real world and the time the generalists get in and get out.
(Leuty) So where are we now in this investment cycle? Is there a bubble?
(Greenwood) I don’t think so at all. When you look at price-to-earnings rations and other indicators, the investments are really being made on a sound basis. In July, the chair of the Fed indicated at a Senate hearing that there was some froth in a couple of sectors, including biotech. We had a call with them last week to see how they form their analysis. They were really not as conversant as we are about there being so many companies that don’t have earnings for a very long time. There were questions saying this is a bubble, but none of the hard numbers indicate this is a bubble.”