As the economic downturn continues to run rampant, not only in the United States, but all over the world, it is no surprise that the Biotechnology and Pharmaceutical industries are taking a hit as well. However, a recent disturbing trend has shown that the Bio-Tech industry seems to be more susceptible than most had previously thought. Because of the high cost of production and research in the Bio-tech industry, many companies don’t know how they will manage to survive much longer. And as this economic recession continues to barrel on with no end in sight, many Bio-tech companies are just hoping that they will still be in business when it is all over.
Among the many large industries being affected by this economic recession, the Bio-Tech industry is particularly vulnerable. It is not uncommon, in the Bio-Tech industry, for years to go by without receiving any kind of new revenue, as well as just have a little operating capital left in the bank to survive. In the past, when the market was better, this wouldn’t be wholly unlikely. If a drug company was showing signs of progress or if they had a promising new drug in development, it wouldn’t be surprising for it to get flooded with investment capital, to start larger, more lucrative projects. But, regrettably, this is no longer the case. Since the economic downturn started showing its ghastly effects last year, fewer people have been investing, and investment capital is becoming ever scarcer.
However, over the past few weeks things are starting to look up for the Pharmaceutical industry. As the stock market begins to rally, some larger Bio-tech companies are seeing big gains, and even bigger investments. Take over rumors are prevalent, as stock prices are beginning to rise. Some life sciences consulting firms are even projecting that the Bio-Tech industry could even make a full recovery within the next 5 years. However, not everyone is so optimistic.
In the first half of 2008 the Bio-tech industry raised more than 8.3 billion dollars until the recession hit. However, this year they have only been able to raise about 6 billion. Investment capital is down, as well as government assistance. But this could all be subject to change. With the recent Swine Flu concern many Bio-tech companies are clamoring to get a piece of these high valued government contracts, which could be worth tens of billions of dollars. As the flu season approaches, and as stocks continue to rise, pharmaceutical consultancy firms believe the Bio-Tech industry could very well have put the worst of it behind them.
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