Business
With VC Funding Drying Up, Biotechs Are on a Quest for Cash
After years of abundant funding, today’s scarce capital is prompting layoffs and deals with Big Pharma.
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For much of the past decade, venture capital firms and other investors were eager to throw money at biotech startups in hopes of bankrolling the next billion-dollar medicine. These days, fledgling drugmakers spend as much time convincing investors they have enough cash to survive as they do developing the promising treatments in their pipelines.
How often are biotech executives questioned about cash? “Every single conversation,” says Marcio Souza, chief executive officer of Praxis Precision Medicines Inc. Shares of the company, which aims to treat central nervous system disorders, have plummeted 80% over the past year.