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Takeaway: "Biotech IPOs and venture capital fundraising is down. Slow growth is negative for risk appetites which is negative for fundraising."

Bullish On Biotech? Don't Buy The Bubble Brofessor - Bubble bear cartoon 09.26.2014  1

On The Macro Show earlier today, Hedgeye Healthcare analyst Andrew Freedman responded to a subscriber's question about Biotech (IBB) stocks. As Friedman said:

"If you want to be long biotech here you have to ask yourself: Do you think the fundraising environment is going to get incrementally better from here? Biotech IPOs are down and venture capital fundraising is down. Meanwhile, slow growth is negative for risk appetites which is negative for fundraising."

 

It's a viscious cycle. Below are three charts that outline why he thinks the biotech bubble has popped:

Click images to enlarge.

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Bullish On Biotech? Don't Buy The Bubble Brofessor - biotech2

Bullish On Biotech? Don't Buy The Bubble Brofessor - biotech