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2Q 2013 Biotechnology Performance and Financing Overview

Biotechnology sector performed well on both public and private markets. Large public biotech stocks continued to climb while smaller stocks remained leveled. Private financing deal flow increased substantially, albeit leaving early stage start-ups behind. Biotech sector experienced an overall increase in VC activity during 2Q 2013 and after much less inspiring first quarter. The comeback of VC funding was consistent with strong public markets as well as high, 13, number of completed Life Sciences IPO transactions.

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More Updates

New Common Stock Valuation Guide – Are Valuations Going Up?

Not to be outdone by 2025’s public stock markets, private stock valuations are about to go up. We can thank the new draft AICPA guidance. A new approach to secondary transactions and liquidation preferences is likely to increase the valuations of some common stock.

Market Multiples: You Probably (Very Likely) Need to Revisit

The market approach is very popular in valuation. One simply multiples a financial metric, e.g., revenue or EBITDA, by a market multiple. For example, with 5.0x EBITDA multiple, a company with $10 million in EBITDA is worth $50 million. Comparable publicly traded companies or transactions (the “comparables”) provide the multiples.

Six Purchase Price Allocation Issues to Know

AI may not catch up with valuations for purchase accounting very soon. We can credit changing best practices and a steady flow of non-authoritative guidance. They always bring fresh considerations and new calculations to explore. Yet, there are real practical implications for clients to consider.

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