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Biotech / Medical : Biotech News -- Ignore unavailable to you. Want to Upgrade?

To: Doc Bones who wrote (6574)	7/24/2009 11:16:44 PM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 7143

Bankruptcy is the newest “Exit” strategy July 24th, 2009 Henry McCusker The ongoing economic crisis had made bankruptcies; one of the newest “EXIT” strategies for many emerging small cap healthcare companies. The companies most at risk have less than 6 months of cash and usually no “definitive” clinical data in the near future. It has been stated that 25% of emerging small cap healthcare companies (usually biotechs) fall into this category of teetering on the edge. Is one of the issues the plethora of “me to” platforms? Many CEO’s are still married to the big “IF” – access to capital as they teeter on the brink of bankruptcy, go into hibernation, cut staff and development programs to preserve cash. The financial crisis is making bankruptcy more likely as – NO – source of capital or lifeline is available to bail them out. The past historical model WAS being acquired or entering into an asset licensing but in this economy M&A and “strategic options” have passed them by … as they waited – TOO LONG! Referencing cash raising, “The amount raised this year by (biotechnology) companies fell by $9.7B through 9/09, or 54%, compared with the same period in 2007. Financing fell to $8.2B through9/09, from $17.9B last year. Venture capital funding fell 16 percent, to $2.9B” (Bloomberg) Bankruptcies, shuttering, liquidations, operational suspensions or voluntary assignments include: MicroIslet, AtheroGenics, Biopure, Oscient Pharmaceuticals, Epix Pharmaceuticals, Orchestra Therapeutics, Dynogen Pharmaceuticals, Inc, Nanogen, Luna innovations, Isolagen, TorreyPines, Protein Sciences (later acquired by Emergent BioSolutions) Northfield Laboratories, DiObex (liquidating its assets), Akesis Pharmaceuticals, Chemokine Therapeutics, Chad Therapeutics as well as a few more. The prospect of merger, liquidation and distributing cash to shareholders such as NTII also exist but, many boards just hang on … reducing their cash and asset position. While so many companies are into “survival” model”; most should plan to begin the process of selling their depreciating assets, cease operations, seek bankruptcy protection or wind up their business. Again, I bring up the issue of where is the oversight? The old model of development and funding is BROKEN … Stronger platforms, management capacity (with solid relationships to investors) and cash positions … can and will be financed. scimitarequity.com Categories: Biotechnology, Healthcare, Independent Equity Research Tags: