Biotech companies now receive billion dollar valuations since their IPOs in 2011 that created a new surge for other companies in the industry to go public, The Wall Street Journal blog Venture Capital Dispatch reported.

Close to a dozen biotech startups have attained valuations of at least $1 billion due to increasing share prices despite the fact nearly not one of them have rolled out a product commercially yet. One high-flyer is chronic liver diseases maker Intercept Pharmaceuticals Inc that has increased 2,300% since it went public last October 2012. It is now valued at $7.13 billion even if it is still conducting clinical trials on the road to getting approval from the FDA. Like Intercept Pharmaceuticals, many other pre-commercial firms have also increased their share prices two to three-fold since holding their initial public offerings, the report said.

Citing data from Dow Jones VentureSource, the report said a surge of fresh biotech IPOs have occurred in the past two weeks, bringing this year's total to 15 firms. This was after last year's robust second half. Investors in the public market which seen the growth of biotech firms like Celgene Corp, are on the lookout for the next innovative drug developer and are lured to the promise of the experimental therapies of these young firms, the report said.

The increasing stock prices of this group of firms reflect the state of health of biotech in the public markets. The Nasdaq Biotechnology Index increased from 1,500 to 2676.28 in just a year, the report said.

According to observers, this is not a repeat of the bubble which occurred in 2000 as the firms that are holding their public debuts today have taken their therapies to advanced clinical studies and as such, they are seen as a low-risk investments by investors, the report said.