The State of Biopharma:Navigating a Stormy Climate
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July 26th, 2022, webinar summary
The biopharma sector remains full of uncertainty with peak negative sentiment heading into the halfway point of 2022. With the public markets closed for much of the second quarter, companies are seeing the ripple effect of a capital-constrained environment. In this webinar, Locust Walk and other industry leaders exchanged their views on navigating the current state of biopharma and positioning for a successful future.
The panel includes: Geoff Meyerson, CEO & Co-Founder of Locust Walk (moderator), Esther Rajavelu, CFO of Fulcrum Therapeutics, Rich Murray, CEO and President of Jounce Therapeutics, and Andy Meyerson, Managing Director at Locust Walk.
The question at the top of everyone’s mind remained the same, is the worst yet to come? As we continue to ride out the storm, savvy companies are reaching a steady state, re-focusing, and pressing forward amid the chaos. For biopharma management teams, this means resetting expectations and revising business plans to be more conservative focusing on fewer programs to get through a value inflection point. Understanding their strategy and rapidly executing against it to preserve capital through value-creating milestones has become essential for both public and private companies. Companies that can mitigate binary risk by stretching their capital will ultimately find greater success. While there will be companies who will be able to raise capital with positive data, the panelists believe this is a “stock pickers” market where most companies will lag without material catalysts, and some will succeed with positive news flow. We can expect continued consolidation across the industry even as there was some thawing of the markets in July. Importantly, the fundamentals of biotech remain true, patient centricity and innovation will drive success.
For companies that raised funds in 2021 (public or private), those valuations are disconnected from present-day comparables. The panelists emphasized creating an open dialogue between management teams, boards, and investors to find a fair valuation. Companies need to have clear use of funds as they rationalize their programs and capabilities. Furthermore, the panelists stressed the importance of strategic deal-making in the current capital environment to extend runway and reduce burn. Companies should prepare to weather another 12-18 months of uncertainty, to position themselves for success in the next fundraising cycle.
Listen to the webinar to hear first-hand from these industry leaders to learn in more detail how biopharma can capitalize during these uncertain times.