CREJ

B iotech startups have long-term goals with acute short-term financ- ing requirements. Long drug-development cycles typically require multiple rounds of follow-on financing to advance through clinical trials. The role of private capital is particularly impor- tant in supporting high beta compa- nies where the public markets have difficulty in assessing value. Biotech startups are unique from technology startups, with biotech companies having faster access to venture capital financings. The median time from founding to initial public offering for biotech startups sits at 5.8 years, compared with 9.9 years for tech startups, indicating that venture-backed biotech compa- nies are taking advantage of the healthy biotech IPO market. If a drug shows early promise on the path toward com- mercialization, investors also will likely see some sort of liquidity event (for example, an acquisition or licensing deal) before the drug hits the market, which significantly shapes a company’s trajectory. Biotech investors largely focus on a drug’s supporting technology and its biological mechanism of action. The term mechanism of action refers to the specific interaction through which a drug substance produces its effect. A mechanism of action usually includes mention of the specific target to which the drug binds, such as an enzyme or recep- tor. The ability for a drug to suc- cessfully treat an unmet or under- met medical need is a researcher’s objective. For early stage biotech companies, investors focus on technical due dil- igence and de-risking scientific or clinical barriers. For late-stage bio- tech companies, investors empha- size manufacturing, reimbursement and marketing and focus on dis- counted cash flow models to fore- cast revenues and resulting value. Here in Colorado, the majority of biotech companies are research and development focused, with little to no revenues being reliant on pat- ents to protect innovations. In 2021, more than $2.4 billion in capital raised across Colorado’s life sciences ecosystem, doubling the previous record set in 2020. This Please see Life Sciences, Page 19 John Jugl Vice chairman, Newmark Life sciences funding is the air R&D companies breathe INSIDE Converting office into lab space, and a recap of Boulder’s booming market Federal funding comes in, and design considerations for future projects Life sciences Senior housing PAGES 10-12 PAGES 13-16 Market updates, and how technology is shaping several important health care trends Health care PAGES 4-8 April 2022 In Colorado, the majority of biotech companies are research and development focused, with little to no revenues being reliant on patents to protect innovations. Since 2010 in Boulder County, life sciences companies have been involved in $28.1 billion in venture capital, private equity, public equity, and merger and acquisition transactions. Pictured here is Pfizer’s Boulder research and development campus located at 3200 Walnut St.