Public Biotech: The Next Credit Crisis Victims

It is, admittedly, a bit of a stretch to connect the following finding in a new NBER paper to the recent credit crisis, but it’s plausible that the sector’s sensitivity to cost of capital is being overlooked:

In the current study we find that biotechnology firms are exposed to greater financial risk than other industries … Average nominal costs of capital over the 1982-2005 time period were 16.25 percent for biotechnology firms.

Related posts:

  1. It’s Good^K^K^K^KBad to Be King
  2. Hearing on Venture Capital in Biotech
  3. Basement Biotech
  4. The Rise of Public Private Equity
  5. Happy Biotech Days are Here!


  1. Deepak says:

    IMO there is so much risk and upfront capital costs with most biotech firms, you could probably connect any sector’s sensitivity to public biotech :)

  2. Anthony Staines says:

    The sector looks like the internet sector circa 1999. If you have a great deal of money, or better yet, a great deal of someone else’s money, there can be few surer ways to lose it all than biotech startups!