In-depth report| innovative drugs are cold in the world, and biotechnology companies are facing financing difficulties!

A record bear market in the biopharmaceutical industry: 128 small and medium-sized biotech companies are worth less than cash

Analysts at jefferies, a well-known investment bank, quantified the market downturn and came up with specific figures that 128 small and medium-sized biotech companies are currently worth less than cash and cash equivalents

Small and medium-sized biotechnology companies refer to biotechnology companies with a total market capitalization of $0-5 billion, referred to as SMID companies

This result, combined with other indicators such as a slump in the biotech index, major restructurings, layoffs, blocked R&D pipelines, and the search for "strategic alternatives" made the bear market in the biotech industry worse

While Jefferies predicts that 2022 overall will be a tough year, it also expects that the second half of the year may bring some respite if it encounters increased mergers and acquisitions by big pharmaceutical companies

In 2021, there were a record 152 biotech IPOs worldwide, raising more than $

According to LifeSci Capital, as of now, only 9 biotech companies have gone public in the U.

Nasdaq-listed biotech company market value falls 70%

Compared to its 2021 peak, the Nasdaq Biotechnology Index, which has fallen 26 percent as of April, has negative corporate values in nearly a third of the stocks that make up the biotech index, suggesting that the combined value of equity and debt of these companies is lower than the cash held, and the market is not optimistic about the prospects of

Figure 1 Market capitalization of NASDAQ biotech companies since February 2021

Figure 2 Nasdaq biotech stocks have continued to plummet since 2022

Financing difficulties for listed biotech companies

In 2018, when U.

The Genocea example is a microcosm of the tough woes facing the biotech industry, with record-breaking interest rates, a bull market in the stock market, and a lot of investment in the past

For publicly traded biotech companies that cannot rely on existing investors, there are only a few ways to survive: raising shares at a high discount, obtaining a high-risk loan, monetizing future royalty streams, partnering with or being acquired

The industry believes that the quality of biotech companies in the public offering market is lower, in part because of the chaos

Measures for listed biotech companies facing financing difficulties

According to Torreya Capital investment banking data, nearly 200 listed biotech companies around the world are trading below the value of their cash reserves, and as the shortage of funds in the public market increases, more and more biotech companies have to accept harsh trading conditions

In early June 2022, California-based Zosano Pharma, which develops migraine dosing patches, filed for bankruptcy protection

If the pressure continues, the industry's woes could put more companies under pressure

For those biotech companies that have not yet gone public, the conditions are slightly less onerous, and at least there is an option to try to start