BEAM - Morgan Stanley says about a third of biotechs will need financing in 2022

About a third of biotech companies will have one year of cash or less by the end of 2022, the Morgan Stanley analysts led by Matthew Harrison said this week based on a sample of 380 firms. While the number of companies requiring cash is similar to the levels seen before 2018 – 21, the overall cash needs at approximately $36 billion are higher, the analysts added. During 2012 – 17, there were 84 follow-on offerings for $11 billion per year of total funding, according to the team. However, during the peak of 2020 – 21, 230 financings generated $51 billion per year in total. Notably, the 110 companies with potential funding needs have performed slightly lower than the industry average in the recent past, the analysts added, pointing to an average return of -39% over the past six months compared to the -33% decline in the SPDR S&P Biotech ETF (NYSEARCA:XBI).

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Morgan Stanley says about a third of biotechs will need financing in 2022