Biotech Bust?
Portfolio has a story up, Biotech Decline:
Even the industry’s lobbying group, the Biotechnology Industry Organization, says that 45 percent of publicly traded biotech companies will run out of cash in the next 6 to 12 months. A mere 10 percent of the 370 listed companies have a positive cash flow.…
Much of the activity at the J.P. Morgan conference involved companies and investors that still have money shopping for deals. “We are being visited by a number of companies,” said Jay Flatley, CEO of the genomic sequencing company Illumina, based in San Diego.
Illumina recently announced an $18 million development deal with Oxford Nanopore of Britain for its next-generation genetic sequencing technology. Illumina has remained profitable with a healthier-than-average stock price even during the downturn.
Dan MacArthur has more on Illumina & Oxford Nanopore.
Labels: Biotech
Biotech has gone through three boom-bust cycles, with the first being when Genentech went public in 1980 (same year as Apple). The basic problem with biotech is the high costs and long time periods required for regulatory approval for anything clinical. Industrial applications do not require such approval, but marketable applications have been very minimal (a few industrial enzymes and the like).