Crisis and biotechnology: we are dying, but we are not giving up!
Ernst&Young: More biotech companies will be in trouble
Ilya Dugin, Pharmaceutical BulletinIn the current conditions, even more biotech companies may put themselves up for sale or go out of business altogether due to lack of funding than during previous economic downturns, according to a report prepared by the audit and consulting company Ernst & Young.
Informs about this in.reuters.com .
The annual "survival rate" compiled by the company shows that by the end of 2008, 162 public biotech companies (44% of the total) had cash for less than a year of operation. A year earlier, this figure was 25%. Usually, according to Ernst&Young reviews, about a quarter of all biotech companies fall into the risk group every year, but these are rarely the same companies, since most of them manage to successfully solve the financing problem. However, in the current financial crisis, the sources of financing have dried up.
Glen Giovannetti, head of the Ernst&Young Biotechnology research group, noted that the current financial crisis has turned out to be deeper and more systematic. "Some companies will not wait for the industry to revive," he said. As a result, smaller biotech companies put themselves up for sale and, if they fail to find a buyer, go out of business. Although large pharmaceutical companies are looking for ways to replenish their product ranges, this does not mean that any small biotech company will be able to find a buyer.
Despite financial difficulties, the Ernst & Young report says, in general, the biotechnology industry is on the rise. In 2008, global sales of public companies increased by 12% to $89.7 billion, and net loss decreased by 53% – from $3 billion to $1.4 billion. In the United States, biotech companies have shown cumulative profits for the first time in history.
Portal "Eternal youth" www.vechnayamolodost.ru06.05.2009