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Extent of biotech's vulnerability revealed

A global survey of the biotech industry conducted by Ernst & Young has confirmed that the global financial crisis has adversely affected the capital invested in biotech companies

A global survey of the biotech industry conducted by Ernst & Young has confirmed that the global financial crisis has adversely affected the capital invested in biotech companies. According to the report, 162 biotech companies in the US have less than a year's supply of cash on hand. 

Pharma companies had been looking to biotech start-ups to feed their R&D pipelines as patents run out on their established drugs. Smaller firms have relied on these partnerships, together with cash injections from investors and venture capitalists, to fund the drug discovery process. However the global financial climate has made these investors more averse to risk and left biotech vulnerable.

Ernst & Young's annual 'Survival index', released today, predicts that lack of financing will see more biotechnology companies trying to sell up, but those that do not find buyers will go out of business. 

Despite the current funding crisis the report demonstrates that, overall, the biotech industry is still growing.

5th May 2009

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