Debt hangover

While the cure for an alcohol hangover can be a little hair of the dog, the cure for a debt overhang is not more debt. As stock prices sink further and further below conversion prices, and public companies see no financing window in sight, the dates for conversion/payback don't seem quite so far away any more.

Biotech's debt problem is a leftover from the last financing bubble, when many biotech companies elected to use convertible debt to raise massive amounts of money. By BioCentury's count, 82 companies raised $16.4 billion via converts after the last biotech window opened in the fourth quarter of 1999. ...