Hard times are forcing biopharma companies to extend their runways as they try to eke out every cent of value from their capital. This goes beyond conserving cash and prioritizing programs, affecting how they consider their opportunities.
The approach companies take depends upon their size. “At smaller companies, success depends on being able to generate positive data and thus attract investors,” Lance Minor, principal and life sciences national co-leader at BDO, told BioSpace. “If tightening the belt means focusing resources on getting to that next clinical readout, that’s an appropriate approach.”
In contrast, he continued, “With mid-sized companies, prioritizing their pipeline to meet earnings projections or better manage cash probably has a lower overall impact on the company and its stock price.”
Although some companies are delaying launches, “Extending the runway doesn’t necessarily mean slowing down,” Minor stressed. Instead, it may mean shepherding resources by narrowing clinical trials to focus on fewer indications rather than targeting multiple disease types simultaneously.
Analysts say financing options are likely to remain constrained for the remainder of this year.