top of page
Business Meeting

Hidden Consequences of COVID-19: Why Small Biotechs Can't Just Wait This One Out

By C. Simone Fishburn, Editor In Chief

It’s still anyone’s guess as to how long the COVID-19 outbreak will take to peak, let alone wane after that. But small biotechs could see knock-on effects that play out over a longer time frame than the course of the virus’ spread. Anticipating those, and acting pre-emptively, might be the difference between emerging unscathed and spending years making up for lost time.

The pressing question is what is the tipping point at which the disruptions to daily business turn into long-term problems.

The point isn’t that there’s zero chance of an all clear within the next few weeks, so that’s the time frame to worry about. It’s that there’s a fair chance this could carry on through year-end.

Delays in clinical trials, a by-product of the restrictions on travel as well as transport of APIs, would jeopardize milestones that not only serve as catalysts for public investors, but trigger deal payments that companies have been banking on. That would affect balance sheets, with implications for FTE counts and future operations.

Other effects are more intangible, but no less consequential. The strictures on travel will mean a loss of face-to-face meetings. Partnering deals, M&A and investments all come about through long-term relationship-building that is often seeded at conferences and in-person meetings -- the reason executives spend much of their time on the road.

Arguably, pharmas and big biotechs will take less of a longterm hit. Supply chains will be hurt. Sales will likely suffer, and the market downturn and delayed regulatory submissions

will throw off their projections. But they have large teams that drive relationship-building, and less hangs on any single lost opportunity. None of this will impose any existential risk.

For the thousands of companies with small pipelines, though, how long they can ride this out depends on where they are in the development cycle, how much cash they have and how they manage it, and what alternatives they can find to keep building while hunkered down.

We’re all consumed and concerned by the spread of cases and the human cost of this crisis. The public health impact and progress of countermeasures, rightly, are front of mind (see “Coronavirus Analysis”).

Companies are, or at least should be, attending to the first orders of business: the ability to contribute to the global effort, the health of their employees, and their financial stability through the uncertainty.

But that’s not enough -- there’s no room for a “this too shall pass” approach. The success stories will come from companies with contingency plans, rather than those who cross their fingers and hope.


Clinical outcomes

Biotechs with 2020 trial readouts or starts will need to plan for clinical delays that could affect regulatory submissions, as well as the milestone payments and investor activity that the readouts bring.

All of this will affect the P&L. Companies cannot continue to burn cash with stalled programs. Fund-raising should be a priority, even if the coffers seem full enough now.

Being far from an outbreak center offers little insulation from the risk.

China is a major producer of APIs -- together with India accounting for 18% of worldwide FDA-certified manufacturing sites, and, according to Sanofi (Euronext:SAN; NASDAQ:SNY), about 60% of worldwide API production. Exports from China and India are already at risk, which will affect clinical trials broadly, regardless of company size (see “India Restricting API Exports”).

The impact could be even bigger, given the virus’ spread to Italy and Japan, which have the largest number of API manufacturing sites after the U.S., China and India (see “COVID-19: API Sites on the Line”).

Moreover, Italy and South Korea, two of the top three countries hit hardest by the outbreak outside of China, are key areas for industry-sponsored clinical trials, with 1,942 ongoing in Italy, and 1,376 in South Korea, according to China has 1,466 ongoing trials in, and likely many more not recorded in the database. (The third country is Iran).

Clampdowns on movement in affected areas will hit clinical operations, with trial patients and staff not being able to get to trial sites, not to mention hospital resources being diverted to concentrate on COVID-19 patients. One U.S.-based biopharma executive told BioCentury he is keeping a keen eye on Europe, where his company has many study subjects. Restrictive isolation measures such as those in China would mean study sites couldn’t be opened, and monitors couldn’t go in to verify data.

Some workarounds are in play. Remote monitoring of patients offers relief in some trials and means staff don’t have to travel to hospitals -- an option being introduced in some Chinese trial sites. While that might not be in the plans for many small companies, it’s an avenue to explore that could pay off regardless of this outbreak.

No travel, no money

It’s hard to predict the precise impact of curtailed travel, but China has already seen a drop in venture fund-raising in the first two months of the year.

Chinese biotechs raised $268 million in January and February, a 72% decrease from the nearly $1 billion raised in the same period in 2019. The number of companies raising money fell from 15 to seven (see “COVID-19 Stalling Venture Financings”).

Europe and the U.S. have not yet seen a drop, but the numbers are a lagging indicator.

VCs tell BioCentury over and over again that the make-up of management teams is critical to investment decisions. Building trust, especially for newcos and first-time investments, requires meeting the teams, usually many times.

Likewise, IPOs don’t happen without roadshows. Companies that have already done the legwork can still make good. Passage Bio Inc. (NASDAQ:PASG) priced an upsized IPO on Feb. 27, during a week in which major indexes fell 10-11% (see “Passage Prices Upsized IPO”).

But the flood of IPOs that companies planned for the first half, to get ahead of potential election doldrums, may turn into a trickle. Market jitters are only part of the problem. Sending slide decks is a poor substitute for in-person meetings.

That means ramping up meetings while there’s still a window. Beyond deploying executives, it means creatively figuring out how to deploy other stakeholders, like board and SAB members, who may be able to keep the conversation alive with local investors and stop the trail from going cold.

Lack of congress

Conference cancellations are growing daily and almost all major conferences are on the watch list.

The next inflection points could be BIO-Europe Spring in Paris, scheduled for March 23-25, and the AACR meeting in San Diego, in April. The latter was canceled at the last moment during the 2003 SARS crisis.

For BIO, its annual slate of conferences brings in 44% of its revenue, according to spokesperson Rich Masters. For AACR, meetings and workshops represent about one quarter of the revenue, but the annual meeting is a flagship event, and has grown from an important research conference to a major item on biotech’s oncology calendar, arguably matching ASCO.

Beyond the losses for the organizers, the meetings are places where deals are started, research is presented, and panel discussions inform audiences about state-of-the-art thinking on hot topics.

But the open truth is that attending conferences is as much about building a network as about achieving any specific business goal.

Hallway conversations, meetings over drinks and chance introductions will fall by the wayside. Those are the places where deals are spawned, and there are few ways to make up for that lost ground.

BioCentury will publish the results of a survey in the next few days documenting how biotechs and VCs are responding to the crisis.

There’s no recipe for all the contingency plans companies should make. But necessity is the mother of invention, and this could be a good test of how far video-conferencing services can be leveraged, or what other ways technology can be deployed to solve the problem.

Because while the hope is that the outbreak will crest sooner than the worst fears predict, the certainty is that this crisis won’t be the last.

April 6, 2020



NEWSROOM: SAN CARLOS, CA: +1 650-595-5333 CHICAGO: +1 312-755-0798 WASHINGTON, DC: +1 202-462-9582 UNITED KINGDOM: +44 (0)1865-512184


BioCentury Innovations: Idea to IND BioCentury: Phase I to the Patient BioCentury Extra: Essential News for Biotech and Pharma


C. Simone Fishburn, Ph.D., Editor in Chief Editors Emeritus: Susan Schaeffer (2012-2018); Karen Bernstein, Ph.D. (1992-2012)

Jeff Cranmer, Selina Koch, Ph.D., Executive Editors

Steve Usdin, Senior Editor/Washington & Head: Policy & Regulation

Lauren Martz, Senior Editor, Head of Translation & Clinical Development

Karen Tkach Tuzman, Ph.D., Associate Editor & Head: Discovery and Preclinical Development

Paul Bonanos, Stephen Hansen, Virginia Li, Inhua Muijrers-Chen, Ph.D., Karen Tkach Tuzman, Ph.D., Associate Editors Meredith Durkin Wolfe, Winnie Pong, Ph.D., Associate Editors, Data & Analytics Sandi Wong, Ph.D., Assistant Editor Allison Johnson, Ph.D., Senior Writer Elizabeth S. Eaton, Hongjiang Li, Ph.D., Claire Quang, Staff Writers

USE OF IMAGES: Certain Images used in BioCentury Inc.’s Publications, Video Content, Websites, Services, Notices and/or Marketing Materials are licensed from Getty Images (US), Inc. Any such image of a person or object so displayed is being used for illustrative purposes only and any such person or object depicted, if any, is merely a model. For more information see “Use of Images” found under the “Legal”section on the footer of the homepage at®; Because Real Intelligence is Hard to FindTM; BCIQTM; The BioCentury 100TM; and The Clear Route to ROITM are trademarks of BIOCENTURY INC. All contents Copyright © 2020, BIOCENTURY INC. ALL RIGHTS RESERVED. No part of BioCentury’s Publications or Website may be copied, reproduced, retransmitted, disseminated, sold, distributed, published, broadcast, circulated, commercially exploited in any form or used to create derivative works without the written consent of BioCentury. Information provided by BioCentury’s Publications and Website is gathered from sources that BioCentury believes are reliable; however, BioCentury does not guarantee the accuracy, completeness, or timeliness of the information, nor does BioCentury make any warranties of any kind regarding the information. The contents of BioCentury’s Publications and Website are not intended as investment, business, tax or legal advice, and BioCentury is not responsible for any investment, business, tax or legal opinions cited therein or for any decision made or action taken in reliance upon such information. All use of BioCentury and its contents by current subscribers is governed by the BioCentury User Agreement and by all others is governed by the BioCentury Terms of Use, unless a written agreement to the contrary has been executed by BioCentury Inc.



BioCentury’s mission is to provide value-added business intelligence & analysis for life science companies, investors, academia and government on the strategic issues essential to the formation, development and sustainability of life science ventures. BioCentury Inc. BioCentury International Inc.

MAIN OFFICES 1235 Radio Road, Ste. 100 Redwood City, CA 94065-1217 +1 650-595-5333; Fax: +1 650-595-5589

CORPORATE Karen Bernstein, Ph.D., Co-Founder & Chairman David Flores, Co-Founder, President & CEO C. Simone Fishburn, Ph.D., Vice President/Editor in Chief Adam Gordon: Vice President/ Product Management & Marketing David Smiling: Chief Technology Officer Bennet Weintraub: Vice President/ Administration & CFO Eric Pierce: Publisher Susan Morgan: Senior Director/Administration & Human Resources

BUSINESS DEVELOPMENT Joshua Berlin, Executive Director Juli Balestrieri, Kevin Lehnbeuter, Business Development Managers

PRODUCT MANAGEMENT & MARKETING Greg Monteforte, Director/Marketing & Promotional Services Josephine Asciutto-Bunn, Marketing Coordinator

SUBSCRIBER SERVICES Tim Tulloch, Senior Director Orlando Abello, Matt Krebs, Michelle Ortega, Ron Rabinowitz, Account Managers Hannibal Adofo, Marilyn Smith, Subscriber Services

TECHNOLOGY Jenny Nichols, Director/Publishing Lam Lu, Head/Business Intelligence Group

BUSINESS SERVICES Accounting & Billing: Conferences: Data Solutions Support: Privacy Policy: Reprints/Permissions:

PRIVACY & ADVERTISING In accordance with its Privacy Policy, BioCentury does NOT sell its customer information or usage data to third parties. BioCentury does NOT sell advertising in the BioCentury, BioCentury Innovations or BioCentury Week in Review publications. BioCentury is pleased to acknowledge its conference partners and sponsors through promotional announcements in its publications. BioCentury MAY accept paid promotional messages from sponsors, which are displayed only on BioCentury’s websites and in BioCentury Extra.


This edition and the information contained in BioCentury's publications and services are solely for your own personal, non-transferable licensed use and cannot be shared with any other individuals. For information about adding subscribers to your account or obtaining article reprints, please contact


bottom of page