Looking for light at the end of biotech’s bear tunnel

Investors expect more near-term pain for the biotech sector as a run of consolidation continues for small and micro-cap companies with limited cash and few options for raising more. There are signs that biotech may be on the road to a recovery, but if this is the bottom of the market, it’s unclear how long it’ll last.

A barren financing landscape continues to plague biotech as specialists seek out a few highly competitive PIPE deals with a focus on late-stage assets. That’s left early-stage companies to a Darwinian existence, with investors expecting more consolidation across the sector...