NEW YORK, Nov. 24 (UPI) -- Bio-tech start-ups that rely on venture capital are running low on cash as the U.S. economy falters, a trade organization said Monday.
"We're at the most difficult time in the history of our industry," James Greenwood, chief executive officer at the Biotechnology Industry Organization told USA Today.
Halfway through the year, on June 30, more than 25 percent of the nation's 370 publicly traded biotech firms worth less than $1 billion indicated they had less than a half year's cash on hand, Greenwood said.
Since then, investments in biotech companies have fallen, making life difficult for companies that often require 10 or more years to develop a money-making product.
Dow Jones VentureSource reported venture capital investments in biotech firms dropped 17 percent in the third quarter compared with the third quarter of 2006.
"We're starting to see the pain," said biotech analyst Eric Schmidt at Cowen and Co.
Industry analysts, however, say the industry has options.
Promising companies can merge with larger drug companies that have sufficient cash on hand. The combination of cash available at larger companies and the need for new products will spur mergers, said Yaron Werber, an industry analyst at Citigroup Inc.
