Economics – STREAM research

Cash Crash

Think you’re the only one stashing your financial statements in a filing cabinet without first opening them? How do you think biotechnology companies feel? Today’s New York Times ran a story by Andrew Pollack (“Broader Financial Turmoil Threatens Biotech’s Innovation and Cash”) describing the impact of the economic downturn on the biotechnology sector. Among the observations:

– Of 344 companies that NASDAQ is considering de-listing because share prices have fallen to less than a dollar, 25% are biotechnology companies.

– 113 biotech companies now have less than a year’s cash at current spending rates. This is up from 68 in the first quarter.

– One company with major problems is DeCode- the Icelandic genetic research company. This might have particular symbolic significance, given the company’s profile.

– companies are being pressured by investors to cut their research and focus energy on lead products only.

The article goes on to explain that the main problem for biotech companies is NOT credit (apparently, even banks considered most biotech’s too risky to lend to). Instead, the problem is an epidemic of risk aversion among investors, and hedge funds selling biotech stocks to recoup losses elsewhere in their portfolios. The article does note that companies like Amgen, which have widely used products, are thriving compared with the general market. As for the others, one analyst, Andrew Baum, describes the sector as a plane “for which the financial crisis just tipped the nose straight down.” The implications for translational research are obvious. (photo credit: Hawk914, Koga’s Zero- 1942, 2007)

2008 October 29 | Leave a comment | Tags: biotechnology Economics

BibTeX

@Manual{stream2008-126,
    title = {Cash Crash},
    journal = {STREAM research},
    author = {Jonathan Kimmelman},
    address = {Montreal, Canada},
    date = 2008,
    month = oct,
    day = 29,
    url = {http://www.translationalethics.com/2008/10/29/cash-crash/}
}

MLA

Jonathan Kimmelman. "Cash Crash" Web blog post. STREAM research. 29 Oct 2008. Web. 10 Jan 2025. <http://www.translationalethics.com/2008/10/29/cash-crash/>

APA

Jonathan Kimmelman. (2008, Oct 29). Cash Crash [Web log post]. Retrieved from http://www.translationalethics.com/2008/10/29/cash-crash/

Tweet this post

Inflation, Health Care Reform, and Translational Research

by Jonathan Kimmelman

“It’s Health Care Costs, Stupid.” So says Ezekiel Emanuel, paraphasing James Carville, in a Feb 29, 2008 commentary in JAMA. Emanuel argues that expanding health care coverage to the uninsured will be impossible and unsustainable unless the health care system gets a handle on cost inflation.

What does this have to do with translational research? A lot. Most economists agree that new technologies are one of the largest drivers of health care cost inflation. Though unmentioned in Emanuel’s piece, any attempt to rein in cost inflation will need to address incentive structures in biomedical innovation. This would have major implications for translational research (for example, cost controls would adversely affect the ability of biotechnology firms to raise capital). (photocredit: Sister72, 2006)

2008 February 29 | Leave a comment | Tags: Economics

BibTeX

@Manual{stream2008-174,
    title = {Inflation, Health Care Reform, and Translational Research},
    journal = {STREAM research},
    author = {Jonathan Kimmelman},
    address = {Montreal, Canada},
    date = 2008,
    month = feb,
    day = 29,
    url = {http://www.translationalethics.com/2008/02/29/inflation-health-care-reform-and-translational-research/}
}

MLA

Jonathan Kimmelman. "Inflation, Health Care Reform, and Translational Research" Web blog post. STREAM research. 29 Feb 2008. Web. 10 Jan 2025. <http://www.translationalethics.com/2008/02/29/inflation-health-care-reform-and-translational-research/>

APA

Jonathan Kimmelman. (2008, Feb 29). Inflation, Health Care Reform, and Translational Research [Web log post]. Retrieved from http://www.translationalethics.com/2008/02/29/inflation-health-care-reform-and-translational-research/

Tweet this post

Cash Crash

Inflation, Health Care Reform, and Translational Research

Search STREAM