The Covid-19 pandemic is taking a harsh toll on small biotech companies, many of which have only enough cash for the next year of operations and expect they will have to reduce the amount of money sought in new financing rounds or delay such efforts altogether, a new survey finds.
Not surprisingly, a growing number of these companies are coping by reducing staff, slashing compensation, or cutting spending on pre-clinical trial programs, according to the survey of 106 biotech companies by the Bernstein investment bank and BioCentury.
Specifically, just 40% have enough cash for less than one year without needing additional financing, and only 22% can support ongoing operations with cash on hand for more than two years. But among private biotechs, a mere 13% of companies report having enough money to survive for more than two years, while 41% of public companies are in that situation.
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