Biotechs Face New Year Hangover From IPO Overhang

Venture capitalists could be dumping a blizzard of biotech stocks onto the market early next year, dampening demand for the risky paper.

That's when a record number of six-month lockups expire for the bumper crop of biotech IPOs that hit the market this year. After lockups expire, early investors and other insiders can sell the shares they may have picked up for pennies, generating hefty gains.

According to Lehman Brothers, lockups on 22 biotech IPOs are slated to expire between Jan. 13 and Feb. 10, the largest number ever. If the early venture capital investors offer all their stock, more than 367 million shares will hit the market. ...