At a time when the business world is reeling, biotech companies are still hanging on. Many biotech startups have successfully pivoted their entire platforms to focus on coronavirus-related work.
Of course, these companies aren't without their struggles. Clinical trials have come to a pause, finding investors has become more difficult and financing rounds have been surceased.
Even then, there are many biotech startups that have managed to snag government loans via the Paycheck Protection Program among other financial assistance. According to Vivian Doelling, the vice president of emerging company development at the North Carolina Biotechnology Center, COVID-19 has not impacted the bio science industry as much as it has others.
"Some of the smaller biotech companies have pivoted research to be more COVID-centric. This is also true particularly for companies with open platforms or who were developing products in the antiviral space," Doelling told BioSpace, an online biotech publication.
"To add to that, there are research organizations that are receiving more pandemic-centric business from biotech. And that includes clinical trial work," she continued.
Ongoing biotech challenges
It's no surprise that there have been some concerns regarding the delay of clinical trials for products that have nothing to do with coronavirus. It is feared that the delays might create product pipeline problems in the long run. See, companies usually file patent applications before trials even start. So, delays in clinical trials, according to Doelling, "could take up a big chunk of the time in which treatments can have patent exclusivity before generic competition intensifies."
Delays negatively impact smaller biotech startups. These startups' futures typically rely on the success rate of trial outcomes. Any delay in these trials subsequently hurts the small biotech startup. But, even then, the pandemic still doesn't seem to be affecting these startups.
"The expectation is investors are going to hold back more funds than they projected for their portfolio companies. There could be less funding available for new investments," expressed Doelling. However, it is her belief that biotech companies are hot investments right now, and sees new investments on the horizon.
"Investors are cautious at the moment," said Marty Rosendale, the CEO of the Maryland Tech Council, to BioSpace. "They're going to analyze their own portfolio to make sure those companies are solid."
Rosendale, echoing Doelling's investment concerns, says investors want to be more careful right now. They are making it a point to invest less money, which makes it difficult for startups seeking funding.
Keep on keeping on
Many startups are continuing to operate because they've found their rhythm in the virtual workplace. "I have not come across any biotech startup that has closed its doors during the pandemic," Rosendale said. "Sure, some have faced delays and temporarily stopped operations, but overall, haven't heard of any closing for good."
There are a few forces at play when it comes to helping biotech startups stay afloat during the pandemic storm. Landlords are forgiving rent and government loans are helping companies pay employees. "I know of companies that have been out there fundraising since the beginning of the COVID crisis. And they're still out there doing it," Rosendale said. "But I still haven't heard of one company that was forced to end or even delay a round of funding, not one."
This article originally appeared on the University of Houston's The Big Idea. Rene Cantu, the author of this piece, is the writer and editor at UH Division of Research.