Biotech Values

[jbog]

Biotechs could face cash crunch next year - Leerink

Endpoints News' John Carroll reports that, according to Leerink's Geoffrey Porges, a number of biotechs may encounter a need for additional capital next year.

According to Leerink's estimate, biotech IPOs raised ~$128B over the past five years, but only $43B remains after burning through $85B through Q3. Aggregate cash consumption is $3.5B per quarter, implying an overall runway of over three years, but 30% of the companies have less than 18 months of cash.

Since the capital markets have lost their appetite for additional share offerings, Mr. Porges believes biotechs will have to pursue other sources of capital such as convertible debt, royalty financing and even asset sales.

RVNC will probably have to do something late Q4 or early Q1.