SURVEY: Small biotechs tighten belts, seek alternative funding to avoid low-valuation deals

As valuations plunge, biotechs seek alternatives to equity and acquisitions

Small biotechs are treading water through the market downturn, conserving cash to avoid being scooped up or forced into asset deals at reduced valuations.

A survey of 106 biotech companies by BioCentury and investment management firm Sanford C. Bernstein found biotechs are opting to defer equity financings and acquisitions, aiming to manage their way through the COVID-19 crisis by forming partnerships, cutting spending on payroll and programs, and taking on debt.

Over half of the biotechs said they are making moves that could enable them to wait out the situation.

The majority with IPO plans are electing to defer the listing. About a quarter are proceeding as planned, and less than 20% are proceeding at lower valuation or raising less money.

The same is true for acquisitions: while only a handful of companies had solid plans for a sale

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