Biotech Venture Capital: Investment Opportunities

Author : Agronomics Limited | Published On : 13 Jan 2022

The investment world is quickly evolving. These days, people in the US are allowed to invest in small businesses and start-ups owing to the JOBS act. You can easily diversify the portfolio and invest in private firms that range from video games to local breweries to real estate and fitness products. Also, you can invest in biotech venture capital and healthcare firms that were the exclusive field of venture capitalists!

New therapies

According to recent research, emerging biotech companies account for nearly 80 percent of the drug industry, meaning small firms are the major motivating force behind developing creative new therapies. The recent pandemic is a good example of this. Small biotech firms helped develop the first two COVID-19 vaccines in America. With major trends like an increase in life expectancy, an ageing population and a load of chronic diseases like diabetes and obesity, the chances of developing new therapies have never been better.

Good returns with risk

While you invest in early-stage small biotech venture capital companies and startups, it will offer you the potential to produce huge financial returns, but just like any other investment they carry risk and early-stage investing nature makes them even riskier. In order to produce financial returns, firms will require to demonstrate that their technology and science are sound enough and can be authenticated; in preclinical studies and in medical trials. Solid evidence that therapy or procedure can benefit people is not an assurance that the studies will back it up; biology is always innately unpredictable. Moreover, healthcare includes a variety of sub-verticals like medtech, biotech, diagnostics and such, each working in a regulated environment with unique pathways to endorsement and each with unique reimbursement frameworks.

Verdict

Professional investors have learned things the hard way in the past. Just since a product is endorsed by the FDA it doesn’t mean that it will get reimbursement or ample enough reimbursement to develop a sustainable business out of it. Therefore, when seeking to invest in biotech venture capital, it is always best to take a look at the patient and market demands!

About the Author:

Agronomics(LSE: ANIC), the AIM-listed investment company, remains the only UK based vehicle that provides the public with an opportunity to engage in a sector which is likely to become the future of our food. August saw Agronomics participate in BlueNalu’s latest fundraising round following the announcement of their First-of-its-Kind Commercialisation Strategy. When Jim Mellon and Anthony Chow return from attending the Good Food Conference, I am sure the September buzz for this hot sector will continue.