Credit crisis could cripple European drug pipeline

Anyone looking for some upbeat news about the U.K biotech scene might want to avoid reading The Times today. The British paper outlines deep cuts in Big Pharma's R&D departments at the same time the credit crisis is driving new money out of the biotech field. The end result: A cash crunch that is directly threatening the development of new medicines.

 "Like many other sectors, the pharmaceutical industry has had tough times...there is seemingly no way to speed up and improve the drug discovery pipeline, and heavily increased R&D has not increased the number of new drugs," says David Wield, director of the Economic and Social Research Council. "As a result, big companies have been laying off staff and closing down research units, instead of looking to biotechnology start-ups for new ideas."

"An AIM-listed company in the UK is likely to need to be able to raise cash soon, as they tend to have less cash than in the US," adds Andy Smith, healthcare fund manager at Axa Framlington. "They will have problems as investors are more risk-averse than in the States and market conditions will be much more difficult than when they last raised money."

- read the article in The Times

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