The Death of Another Good Idea
March 17, 2009 by JD
Filed under Health News, News, Rants
Panacos Pharmaceuticals, a small biotech developer of viral disease vaccines, will probably not survive through the Summer.
Over the last few years I have invested a good chunk of change into various biotech stocks and funds. Aside from the obvious distress of watching my portfolio value drop faster than Barack Obama’s approval ratings, I am saddened by the realization that many of these small niche companies will not survive through 2009. Current estimates say that 60% of the publicly traded biotech firms will run out of money before the end of the year.
It is typically in these small biotech companies where real advancements are made in the fields of medicine and treatment research. A niche biotech company will typically form around an idea for a new treatment approach for some specific disease or disorder. Initial funding is usually provided by VC firms, with a public offering to follow if the “idea” can be sold to the investing public.
Then comes the years of development, testing, and approval cycles mandated by the FDA for all new drugs and artificial devices. If a company can navigate the process and end up with a successful drug or product that does work, then a big Pharma company will typically step in and partner with or outright buy out the smaller firm at a premium price. Everyone wins. Big Pharma gets exclusive rights to sell a new “miracle” drug. The employees and stockholders of the biotech company make money. The United States moves forward in the field of medicine. And maybe some lives are saved, or at least improved.
In the current economic climate, funding is drying up for many of these cure development companies. No money equals out of business.
It is a shame that so many good ideas and potential scientific breakthroughs may be derailed.
I’ve got an idea. Instead of bailing out inefficient and mismanaged mortgage companies and banks, why not send some of that money to promising companies that are actually developing products that will potentially save lives?
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Yes unfortunately a lot of places will close but on the brite side they may not , and if they do another one will come along shortly after. This a game that anyone and everyone involved should fully understand and should also be willing to accept a loss without going on a killing spree.