A CRYSTAL BALL or The Question On Everyone’s Mind
As the new year looms ahead, many are contemplating the imminent changes in the investment landscape. Wouldn’t it be convenient if we possessed a crystal ball to foresee the future? Yet, predicting 2023 doesn’t require magic; it demands insight drawn from recent market trends and good old common sense!.
Since 2020, the investment market has been fixated on biotech—a frenzy driven by an overwhelming urge to fund any and every initiative within the sector. This rush, however, was unsustainable. The market, unable to shoulder this relentless pace, reached a point where the frenzy had to cease. It has slowed down, but as with any force in motion, its cessation isn’t abrupt; it gradually decelerates until it finally halts.
Imagine trying to control an unstoppable force, akin to maneuvering a powerful, unbridled thoroughbred horse. I had to train a spirited horse that would often bolt. He seemed impossible to halt and dangerous to ride. However, by learning his cues and exerting constant pressure to turn him rather than try to stop him, he was forced to slow and eventually he stopped. The key was recognizing the signs before he galloped full force. Similarly, the investment frenzy lacked a guiding hand, and like the horse, it is succumbing to exhaustion.
None of us, perhaps, had the reins in this venture funding craze. Even without a definitive controller, the wild ride will meet an end—be it a stumble, a fall, or a collapse due to sheer fatigue.
By the 4th Quarter of 2021, the downturn became evident—funding significantly receded. Companies reliant on private investors found themselves in a race against time, striving hastily and discreetly toward IND in order to release another tranche of funding. Yet, science refuses to conform to the timelines set by profit-driven agendas. Patience is intrinsic to science; success cannot be hurried. Before 2019, biotechs faced funding challenges unless they had reached the optimization stage with a potential compound. However, the landscape changed drastically in 2020. The advent of AI and a surge in funding eclipsed the traditional markers of success, reshaping the criteria for viability.
An invisible hand had just thrown a ball onto a cement floor. Consider this ball. Slamming it onto a concrete floor with tremendous force propels it upward with equal force, initiating subsequent bounces, each progressively weaker until it loses momentum. The biotech community similarly reveled in the limelight for the past three years, but this unsustainable boom had an inevitable end. Statistical data indicates a regression in the biotech investment market to a state resembling that of 2012. My forecast is for a gradual decline in momentum until another substantial slam occurs.
Contrary to the prevailing sentiment, I’m neither anticipatory nor enthusiastic about the impending market shift in biotech investment. Rather, I advocate allowing natural events to unfold at their own pace, letting authentic science drive success in due course, following Newton’s third law of motion—where every action triggers an equal and opposite reaction. It might be time to relinquish control and witness science flourish organically.