Life Sciences Emerging as Asset Class

Until the late 1990s, life sciences was in the early stage of its industry life cycle. Due to lengthy product development cycles, companies burned through large amounts of cash, recorded low profitability and faced a general uncertainty about the marriage of science and business.

Today, the industry has matured and has become a major contributor to US and global economies while generating substantial cash flows for investors. Funding for R&D has increased, and while the cost of product development has not decreased, many companies are now stable enough to cover their financial burdens.

The Bay Area is also home to the venture capital industry–which helps provide many start-up firms much needed seed money. The region has three primary biotech submarkets: San Francisco, South San Francisco and East Bay/Oakland.