Pharma Strategy Blog

Commentary on Pharma & Biotech Oncology / Hematology New Product Development

The WSJ Health blog has an interesting post this morning on "The Great Biotech Shakeout is Near".  Now, that may sound a little alarmist, but since November, 15 have already gone to the wall and the suspicion of a VC firm is that:

"120 out of 360 publicly traded biotechs have less than six months of cash left. A year ago, only 12 companies were in that position."

Burrill & Co.

In theory, this should be a good time for cash rich pharma and biotech to be shopping for good deals to replenish their pipelines.  In reality, our experience is that many are looking keenly, but hoping for a better deal by waiting.  Who knows where the bottom of the market might be?

For some baby biotechs, help in the form of licensing deals or buyouts may not come soon enough as their cash dwindles fast and the credit crunch continues to impact business.

2 Responses to “What will happen to baby Biotech?”

  1. Lucas Silva

    Sally,
    What do you suggest that baby biotech’s should do to affront the crisis

  2. Sally Church

    Lucas, well there are several things baby biotechs can do.
    1) Focus on cash conservation and efficiencies.
    2) Engage in licensing deals with pharma and big biotech to ensure clinical trials get paid for and future royalties paid out.
    3) Consider buyout/merger opportunities with above.
    4) Focus their efforts on near term registration opportunities rather than try to fund too many indications at once.
    5) Aggressively seek VC funding now rather than leaving until it is too late – these things take time to develop.
    At least those are some of the options our clients are considering, but there may be others too.

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