There's been more news and views this week on how biotech is weathering the financial storm. It's only a matter of a couple of weeks since analysts were telling the Wall Street Journal that the sector was a safe haven in a stormy market. That picture is now looking distinctly out of kilter with reality. Admittedly, at the time it didn't seem to chime with what was going on around the industry.
At the start of the year life sciences was on a bit of a roll but by the summer it was obvious that the economy was catching up with it. With biotech being seen as the riskiest area in life sciences (e.g. long investment timescales for drug development compared to areas like diagnostics and medical devices) it's perhaps not surprising that it's being hit hard.
A report this week from Burrill and Company said that in October biotech had one of its worst months on record. It states ominously that market meltdown "will continue to affect for the foreseeable future the flow of much needed capital into the sector." As we have seen and noted elsewhere this is likely to result in tightening on costs (release of staff and less investment in R&D) with some companies being forced to sell out at less than favourable prices.
On a positive front, my erstwhile state of Michigan has joined its more progressive peers by passing Proposal 2 on Tuesday. According to the Detroit Free Press MI voters approved the embryonic stem cell research measure by 52% to 48% against. Opposition groups including the Michigan Catholic Conference and Right to Life of Michigan funded scare-mongering ads showing images of humans with hooves instead of hands. Proposal 2 amends the state's constitution to allow MI researchers to use embryos surplus to fertility treatment requirements to be used as a source for embryonic stem cells in disease research. Proponents say that the capacity for ESCs to form almost any cell in the body provides untold potential for curing disease. Michigan can now compete and attract investment and talent in this important area.
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