Biotech Funding Gets Hammered
May 20, 2008 · Filed Under General
Biotech may still be a hot place for venture capitalists to invest, but, in 2008, funding has dropped as the entire investing world has taken on water.
Ernst & Young says that money put into biotechnology companies hit a record in 2007 at $21.3 billion with $5.5 billion coming from venture capital.
According to the San Francisco Chronicle, E&Y says “Total fundraising year to date (for biotech) in 2008 is down by 60 percent.”
Private companies will probably be hit much worse than public ones. Another conclusion of the E&Y study is that “Of the 386 publicly traded U.S. biotechnology companies, 49 percent have more than two years of cash on hand, Ernst & Young reported.”
In many cases, two years is not going to cut it.
Douglas A. McIntyre