In this wide-ranging and candid conversation, biotech finance veteran Allan Shaw—who’s served as CFO for five public companies and sits on multiple boards—delivers a no-holds-barred take on the state of biotech in 2025.
From the broken IPO market and investor burnout to China’s rise and the FDA’s existential wobble, Shaw blends sharp insight with dry wit.
With over three decades in the trenches, he’s equal parts realist and raconteur—making this a must-watch for anyone navigating biotech’s current “clean-up party” phase. You’ll laugh, wince, and maybe even learn how not to spill your Bar Mitzvah money
Risks
Investing in biotech today means navigating a perfect storm: prolonged underperformance, rising interest rates, and a broken funding cycle. Regulatory volatility at the FDA adds uncertainty even for well-run companies. With IPOs stalled and M&A selective, liquidity options are scarce. Funds face pressure from LPs demanding cash returns, not paper gains—raising the risk of forced exits. Amid a surge of undercapitalized “zombie” companies, picking winners requires deep diligence, conviction, and patience. Good luck out there!
Roosevelt Island tram, New York. Hartaj Singh. Fall 2023..
Upcoming Newsletter Events
May 2025: Video podcast with Industry expert regarding the effect of tariffs on the BioPharma industry.
Biotech Capital Compass: March Newsletter
Welcome to The Biotech Capital Compass! Your Guide to the Fast-Moving World of Biotech Investing.
If you’re an active investor, swing trader, or simply biotech-obsessed, you’ve come to the right place. The Biotech Capital Compass delivers sharp analysis, market-moving insights, and actionable strategies tailored for those who want to stay ahead in this dynamic sector. Whether you’re trading biotech stocks daily, holding long-term positions, or just fascinated by the next breakthrough therapy, this newsletter is built for you.
We’re Leveling Up—Join the Inner Circle!
Starting January 2025, The Biotech Capital Compass moved to a premium subscription model, following an incredible three-month free run in late 2024. If you’re serious about navigating the high-stakes biotech market, now is the time to get in—exclusive insights, deep-dive analysis, and smart trading strategies await.
Let’s Build This Together!
Subscribers, your feedback, comments, and ideas are what make this community thrive. Engage, ask, challenge, and share your insights—because the best biotech investors learn from each other. Let’s make this the go-to hub for those who want to decode the biotech landscape and capitalize on its biggest opportunities.
Ready to take your biotech investing to the next level? Let’s dive in!
Disclosures at end of note.
About the Author
Hartaj Singh brings over 30 years of experience in drug development, corporate strategy, hedge fund management, and biotech analysis. With a career spanning top investment banks, Hartaj has been a highly ranked analyst, known for providing astute guidance on biotech investments for over a decade. His deep sector knowledge, honed through years of navigating the biotech landscape, is now being put to use to help investors capitalize on biotech opportunities.
Biotech’s Existential Hangover: “Broken Market Syndrome”
The conversation with the Biotech Capital Compass kicks off with Shaw’s bleak but candid diagnosis: the biotech market is not just cyclical—it’s structurally broken. Investor fatigue, a shrinking buy-side, and frantic short-termism dominate sentiment.
“The market is suffering from broken watch syndrome,” Shaw says, referencing how nothing seems to be working, not even sporadically. Years of poor returns have created desperation: investors are “rolling dice” in front of data readouts—an act Shaw likens to a gambler’s last stand.
Capital Starvation and the Cost of Risk
Interest rate dynamics loom large. Optimism entering 2025 has faded, Shaw explains, as bond market volatility and the threat of higher rates sap investor appetite for risk. Without sufficient returns, capital dries up.
Worse still, biotech is hurting its own cause by undermining confidence in the FDA and NIH—injecting even more uncertainty into an already high-risk industry. Shaw calls the result “constipation” in the markets: capital and M&A activity are frozen.
Resource Allocation or Self-Destruction?
One of Shaw’s most urgent themes is capital mismanagement. From 100+ CD19 CAR-T companies during the cell therapy hype cycle to bloated pipelines that lack prioritization, the industry’s capital efficiency is deeply flawed.
Shaw urges leaders to act like money is their “Bar Mitzvah cash”—precious and limited. “Do less in parallel. Know your competition. Focus on the winner,” he insists.
Quarterly Theater: Less is More
In one of his more practical critiques, Shaw questions the value of full-blown quarterly calls for pre-commercial biotechs. “Do less,” he advises—suggesting companies only do calls when there’s actual news.
The Biotech Capital Compass agrees, noting that tough times call for quieter execution, while boom periods require a louder megaphone.
Exit Strategy or Delusion? The Reverse Merger Fix
With over 120 biotech companies queued for IPOs, Shaw sees reverse mergers as a more elegant solution to the bottleneck. Zombie companies—those with no viable paths forward—should seek to merge while they still have “beer left in the bottle,” he quips.
But too often, leaders refuse to relinquish control, despite having already “crashed the car.”
Strategy vs Sentiment: Who’s Still Raising Capital?
Shaw breaks down who can still attract capital: companies with standout data and investors with specialist pedigree in their cap tables. But even then, terms are steep—think structure, warrants, and tranches.
The reality? “Not all green is the same green.” Capital is picky, and access is stratified.
China: Wild Card or Wedge?
Shaw sees China’s biopharma ascent as both a competitive threat and a source of innovation. He warns that the U.S. is ceding leadership at the worst possible time—“blowing up the NIH and FDA while China ramps up.”
With efficient clinical pathways, deep talent pools, and growing regulatory strength, China is “uttering Shanghai in the same breath as Kendall Square.”
Rebuilding Trust: A Slow Climb
In closing, Shaw sees morale at U.S. agencies as dangerously low. Decades of institutional goodwill are being squandered, and the collaborative fabric of biotech is fraying.
“This is a man-made injury,” he states. Repairing it will take years—and real leadership from the top.
Regulatory Disclosures
General Disclaimer
This newsletter is for informational purposes only and does not constitute financial, legal, or investment advice. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making any investment decisions.
Editorial Independence
All editorial content is produced independently and is not influenced by sponsorships or paid relationships unless explicitly disclosed.
No Guarantee of Results
Past performance is not indicative of future results. There is no guarantee that any investment strategies or suggestions provided will lead to specific outcomes.
Forward-Looking Statements Warning
Forward-looking statements are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current assumptions and may involve risks and uncertainties.
Risk Disclosure
Investing, especially in stocks, options, and volatile markets, involves significant risks. All investments carry potential loss, and readers should fully understand these risks before investing.
Affiliation and Conflict of Interest Disclosure
This newsletter may include affiliations, sponsorships, or recommendations from which we could benefit. Additionally, we may hold or trade securities mentioned. Such affiliations are disclosed to ensure transparency and maintain trust.
Holding - BBC ETF, IBB ETF & XBI ETF
Consulting Agreements
Biotech Capital Compass and/or its contributors on occasion maintain paid consultancy arrangements with one or more of the companies. These agreements may involve financial compensation, equity ownership, or other benefits, which could present a potential conflict of interest.
We remain committed to transparency and encourage readers to take these relationships into account when assessing the content of this newsletter.
Trading Blackout Period
To ensure transparency and avoid potential conflicts of interest, my holdings are subject to a trading blackout period. This means that any stocks mentioned in this newsletter will not be traded by me within a specified period before and after publication. This practice aligns with my commitment to providing unbiased information for readers.
Privacy and Data Collection Policy
We collect data, surveys, and feedback from readers to improve our content and tailor insights. Your information is protected and used solely for these purposes. For full details on data security, please review Substack’s Privacy Policy.
Copyright Statement
This content is the intellectual property of the author and may not be reproduced or distributed without prior permission.
Jurisdictional and Age Restrictions Disclaimer
This newsletter is intended for individuals 18 years or older within New York State, the United States, and other permitted jurisdictions. It is not directed to individuals in regions where such content is prohibited.
Risks in Biotech Investing
Biotech investments are subject to additional risks, including regulatory approval uncertainties, clinical trial outcomes, and the high volatility typical of early-stage companies.
Legal Disclaimer
Biotech Capital Compass is not responsible for any investment decisions made by readers. Any reliance on the information provided in this newsletter is strictly at your own risk.
A Biotech Savant production.
Share this post