Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

  • News
  • Published:

Biotech sector ponders potential 'bloodbath'

Nature Biotechnology volume 27, pages 3–5 (2009)Cite this article

An Erratum to this article was published on 01 February 2009

This article has been updated

“Some companies have already gone under as a result of the credit crunch, while others have had to scale back their research,” says BIO president and CEO Jim Greenwood. Five US biotech companies sought bankruptcy protection during November alone, after October's high-profile default and bankruptcy of inflammatory disease research firm Atherogenics, located in Atlanta. Twenty-four small public biotech firms laid off workers in the eight weeks between November 1 and December 5, Greenwood adds (Table 1).

Table 1 Public companies restructuring
Full size table

What's more, average market valuations have collapsed. BIO reports that, as of November 24, valuations of small caps (it defines small cap as a market capitalization of less than $1 billion) were down 53% from their January 1, 2008, values. In fact, BIO says about 35% of the 270 US small-caps were trading at below cash in early December, meaning stock markets valued the firm at less than their cash on hand.

This is a preview of subscription content, access via your institution

Access options

Buy this article

  • Purchase on Springer Link
  • Instant access to full article PDF
Buy now

Prices may be subject to local taxes which are calculated during checkout

Figure 1: Percentage of biotech firms operating with less than one year's cash.
Figure 2
Figure 3
Figure 4

Change history

  • 09 February 2009

    In the version of this article initially published, we neglected to define our categories for public biotech firms. In the following definitions, the dollar amounts refer to a firm’s market capitalization or ‘cap’: microcap, <$250 million; small cap, $250 million to <$1 billion; mid-cap, $1 billion to <$5 billion; large cap, ≤$5 billion. The definitions have been added to Box 2, Figure 1 legend, in the HTML and PDF versions of the article.

Author information

Authors and Affiliations

  1. London

    Peter Mitchell

Authors
  1. Peter Mitchell
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Mitchell, P. Biotech sector ponders potential 'bloodbath'. Nat Biotechnol 27, 3–5 (2009). https://doi.org/10.1038/nbt0109-3

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1038/nbt0109-3

This article is cited by

Search

Advanced search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing