Biotechnology’s Banner 2014 Driven by Big-Data-Wielding Investors

big data pic Midway through 2014, the biotechnology industry has significantly outperformed the general market. The Standard & Poor’s biotech index shows a 13.6 percent gain in valuation over the past six months, a 175 percent increase over the previous year. While some, including Janet Yellen, chair of the Federal Reserve, have expressed concern over the sharp rise in biotech investments, industry experts have found that much of the growing activity in the market is the direct result of increasingly shrewd investors. While the biotech market continues to be volatile, big valuations seem to be coming as the result of big data.

Many investors – rather than looking at individual companies – have begun performing cross-analyses of the drug development pipelines of numerous companies, charting the growth of specific therapies and treatments, as multiple firms explore specific research opportunities. Biotech companies, which have begun offering more data than ever before, have made it easier for investors to see which new initial public offerings are launching with promising technological and medical foundations. Investors, with the knowledge necessary to digest the research coming out of new firms, have the ability to make smart decisions in a market that has been known to be capricious, creating opportunities that have driven huge gains in valuations, as well as 43 percent more IPOs compared to the previous year.

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