Will 2020 be the year of the biotech bankruptcy?
After six years of stellar returns, biotech has slumped below the S&P 500. Drug pricing reform looks increasingly likely, and generalist investors seem to be losing patience with the industry. It’s a gathering storm that could spell bankruptcy for struggling drug makers.
That’s according to BioPharma Dive, which consulted experts and trawled through data to reach a sobering conclusion: 2020 could be bleak for cash-poor biotechs.
Eleven companies have already declared bankruptcy this year, up from an average of four over the past decade. And things could easily worsen. If biotech continues to underperform, capital markets could tighten and force companies to take on debt to keep the doors open, starting a clock that could see them out of business if their fortunes don’t improve.
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That’s according to BioPharma Dive, which consulted experts and trawled through data to reach a sobering conclusion: 2020 could be bleak for cash-poor biotechs.
Eleven companies have already declared bankruptcy this year, up from an average of four over the past decade. And things could easily worsen. If biotech continues to underperform, capital markets could tighten and force companies to take on debt to keep the doors open, starting a clock that could see them out of business if their fortunes don’t improve.
Read more.
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