There are thousands of medical patents registered each year; it is truly a global business. However, when comes to supports and investments, it does make a difference where you are based. We compile this into a series of articles and included in our research report.
Best markets for valuation & listing
First, let us look at the valuations of biotechnology companies. US market still leads the world in terms of both number of listed biotechnology companies and the relative P/E and other forms of valuations.
However, it is not easy to list on the US main boards, the listing fee and associated costs for NYSE and Nasdaq are many times higher than other global markets. You may consider listing on OTC, while the cost is much lower; it is generally much harder to find support and investor supports.
In US, there are certain States particularly supportive to the biotechnology investments and R&D projects, we found regions such as New York, Boston, San Diego, San Francisco amongst the most supportive regions, but some other regions also provide incentives for biotechnology companies to set up facilities and create job growth, we have seen such incentives in places like Utah and Colorado for instance.
Other good global markets that value biotechnology companies more favourably including some European markets, some Asian markets and emerging investment markets. Canada, for instance, does value biotechnology companies fairly well, and is a good choice for listing as well.
Germany is also very supportive in biotechnology developments, especially medical devices, and its investment capital markets are also supportive, as well some of its provincial governments.
Just across the border, Switzerland, is an active capital market for biotechnology sectors, the country also has some of the world’s largest biotechnology and pharmaceutical firms.
The UK share-market, sometimes regarded as relatively more conservative. It also has very large number of biotechnology companies listed, and has generally favourable valuation on biotechnology companies, both on LSE and AIM.
Some of the smaller markets such as Sweden, The Netherlands and Norway also like innovations, and both technology and biotechnology companies are treated well respectively on their stock markets.
The Asia Pacific market is a different story and much more fragmented. Japan is a major biotechnology market, ranked 2nd in the world, the number of patents registered each year is amazing from Japan, therefore, it can be regarded as the capital market for biotechnology industry in Asia, however, it is not easy to list a company there.
China is an exceptional difficult market for listing, and has very strict quota. However, Hong Kong, Taiwan and Singapore are good markets to consider for biotechnology investments.
Both Hong Kong and Singapore are good share-markets for listing for biotechnology start-up companies, but there are certain limitations you have to overcome.
Australia, while it is still a small industry in “Down Under”, it has produced successful global stories, and this has sparked renewed interest in the biotechnology sector.