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

Morgan Stanley says about a third of biotechs will need financing in 2022 (NASDAQ:EDIT)

Mar 26, 2022 by Seeking Alpha

Key Facts

  • RL Photography/iStock via Getty Images 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.
  • 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).
  • However, the analysts acknowledged that the projection might have excluded some of the companies that had major milestones in 2021, which are unlikely to repeat in 2022.

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