Expert advice on surviving $ mess

Written byAlison McCook

| 2 min read

Build up cash reserves, don't over-cut in research and staff... These are some of the steps that can help life science companies get through the linkurl:current financial turbulence,;https://www.the-scientist.com/blog/display/55142/ according to an expert who has made a career out of linkurl:helping life science companies stay afloat.;https://www.the-scientist.com/2008/01/01/s48/1/ We're hearing a lot of linkurl:different prognoses;https://www.the-scientist.com/community/posts/list/233.page for the biotech/pharma sphere. Whether or not this area will be hit harder than others, scientists and CEOs are right to linkurl:be concerned.;https://www.the-scientist.com/article/display/55047/ Last week, I spoke with Gary Kurtzman, managing director in life sciences at Safeguard, which provides capital and expertise to linkurl:life science companies.;https://www.the-scientist.com/article/display/54879/ In some ways, private life science companies remain a safe investment, Kurtzman said, because it takes years for a verdict on that investment, in the form of results of an early trial. In all likelihood, the effects of the global decline in the economy will be long-lasting - for instance, several years ago, investors became permanently spooked after the tech bubble burst. Very quickly, investors went from funding a company simply because the science was "cool" to requiring a business plan, etc, and they will likely react similarly to the current situation - perhaps becoming even "more realistic" about the worth of their investment, Kurtzman predicted. "And that may be not a bad thing." His advice for private life science companies to help them survive these tough times: -Watch your cash spending, and build up a cash reserve, just like you would for your own household, he said. -Don't slow down operations so much you stall your business. Companies want to cut back research to stay afloat during troubled times, but it's possible to slow down so much there is no business left, Kurtzman warned. To make cuts but avoid over-cutting, "you have to be more keenly aware of your environment, so that you know what you should spend your money on and what you shouldn't." -Similarly, employees are a valuable resource, Kurtzman noted, so companies should avoid cutting staff so much the company cannot get its work done. In general, he said he is "optimistic" about the future of the sphere, and has not had to withdraw support for a company he did not believe would survive. But he knows other people in his position who have had to make those difficult phone calls. He added that his job hasn't changed much with the economy, but he has taken more calls from people who were laid off from pharmaceutical companies or are expecting to be soon, asking him if he knows of small companies who are hiring. Trouble is, Kurtzman said, smaller companies are also making cuts. For people who have lost their jobs, he recommends that they adopt an entrepreneurial approach by thinking about what broader skill-set they have, beyond what they did in their last job. "Don't just think about what you were educated for - think about what you could do," he advised.

Expert advice on surviving $ mess

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