How will the financial situation affect biotech?

At a story ideas meeting today, an important question came up-- How will the ongoing financial situation affect biotech? if anyone's got any thoughts/insight, let us know.

Thanks!

Alison McCook
Deputy Editor

Biotech has the potential to be crushed in the current financial situation. Let me explain. First this doom and gloom is not for all companies, but is for companies that do not have a foreseeable product. With money and credit very tight, it will be hard for biotech to obtain the needed operating expenses. When the biotech seeks investors in this market they will need more than an idea, they will need a product that has some significant results and real world applicability.

In a recent Scientist article some companies that were genotyping Quebecois. This sort of interesting science will lose investment because the product is questionable. They will end up like Celera, a company with a lot of genetic data that would have to be sold at a very high price to recoup the cost of collecting the data. This is not a product that is going to make a lot of money, thus investors will back away in an uncertain and risk adverse market.

If a company has a product, then there may be investment, but there also may be buyout deals negotiated by big pharma. If I had to make a guess I would bet that the biotech field shrinks and that space will be occupied by big pharma.

Note: I am an armature investor and a Pharmacologist; I am not an expert in this area.

Biotechnology is technology based on biology, especially when used in agriculture, food science, and medicine.
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