Biotech
Wednesday, November 22nd, 2023 4:43 pm EDT
Key Points
- Sangamo’s Cost Cuts Impact Gene Therapy for Fabry Disease:
- Sangamo Therapeutics Inc. has faced financial challenges, leading to the loss of approximately 162 jobs. The company, citing a “challenging economic environment” in the biotech industry, has paused research on an experimental gene therapy for Fabry disease. This decision is disappointing for patients like Jerry Walter, who has suffered from this rare disease and has lost family members to it.
- Struggles in the Biotech Industry:
- The biotech sector is experiencing a challenging year, marked by the XBI index passing 1,000 days from its early 2021 peak. A record number of biotech companies are exploring strategic options, indicating industry-wide desperation. Funding for research is becoming scarcer, with new flows into biotech venture funds estimated to fall from $31 billion in 2021 to $23 billion this year. Rising interest rates, threats to drug prices, and post-pandemic uncertainties have led many biotechs to pull back on research and development.
- Impact on Innovation and Drug Development:
- The biotech industry’s struggles have resulted in a slowdown in global pharmaceutical research and development spending, with a 2.2% drop to $244 billion in the past year. Smaller biotech companies, known for handling risky early-stage research, are facing challenges in securing funding, leading them to focus on more certain projects. This shift may reduce the innovation and creativity historically associated with the biotech sector. Lab space vacancies in biotech hubs, such as Boston, have reached a 10-year high, indicating broader industry challenges that extend to real estate.
Sangamo Therapeutics Inc. has halted research on an experimental gene therapy for Fabry disease due to the “challenging economic environment” affecting the biotech industry. This decision is a consequence of the broader financial struggles faced by the biotech sector, with many companies grappling with reduced funding, rising interest rates, and uncertainties related to drug pricing and post-pandemic conditions. Sangamo’s cost-cutting measures, including the pause on the gene therapy research, have disappointed patients like Jerry Walter, who has a rare disease and has already lost family members to it. The biotech industry has experienced a decline in research and development activities, marked by a decrease in global pharmaceutical R&D spending, a drop in new flows into biotech venture funds, and an increasing number of companies exploring strategic options. The shift in strategies includes a focus on more certain and income-generating projects, potentially limiting the innovation and creativity that have historically defined the biotech sector. This slowdown in biotech innovation may lead to a scarcity of innovative medicines in the coming years, affecting both patients and the pharmaceutical industry. The impact is also reflected in the real estate sector, with lab space vacancies in biotech hubs such as Boston reaching a 10-year high. The challenges faced by smaller biotech companies may, in turn, have implications for larger pharmaceutical companies looking for new products to replace aging ones. The industry’s woes pose a threat to the development of new candidates for acquisition by larger drugmakers. Overall, the article paints a picture of a struggling biotech sector facing funding constraints, reduced research activities, and potential long-term consequences for medical innovation.
For the full original article on BLOOMBERG, please click here: https://www.bnnbloomberg.ca/a-biotech-slump-is-emptying-labs-and-threatening-research-on-new-drugs-1.2002111
