Biotech Suffers In Credit Crunch

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EmploymentCrossing.com The financial crunch is severely affecting the global biotech industry, threatening to slow the development of new medicines and cut high-tech jobs in the US and Europe, according to the Wall Street Journal. Many small biotech firms are expected to file for bankruptcy, cancel drug trials, lay off workers or sell out to large companies over the coming year, industry executives say. Biotech has produced some of the most successful new medicines for cancer, HIV and other diseases in recent years. In the long term, a hobbled biotech industry would be bad news for big pharmaceutical companies, which increasingly rely on biotech start-ups to invent products the giants can acquire and market. In the US, 38% of 370 small biotech companies are operating with less than a year's worth of cash, and nearly 100 publicly traded biotech companies have less than six months' cash, according to the Biotechnology Industry Organization in Washington. The largest biotech companies, such as Amgen, Genentech and Gilead Sciences, have seen their stock prices fall, but have robust revenue streams that should help them weather the downturn. The financial-market crunch is mostly hitting small biotech firms, public and private, with low revenue and little cash in the bank.

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