IPO Glut May Keep Biotech Offerings From Leaving the Gate

Is the party over for biotech IPOs?

After a record spate of first-quarter fund-raisings, investors are are up to their ears in new biotech issues. Now, with big biotechs sinking well below their highs, the Nasdaq suffering through a 20% decline in less than a month, and the customary big gains in the IPO aftermarket drying up, several big biotech financings are on hold, suggesting that a very lucrative window may be closing on companies in the sector.

Biotech observers say delays in notable offerings stem from a glut of deals that has gummed up the IPO machine in a number of ways by: reducing investor demand, tangling offerings in regulatory red tape and making issues difficult to value. That could spell further problems for a biotech sector that's been hard hit over the last month.

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