Biotech's 'sug­ar high' led to a cor­rec­tion, but win­ter dol­drums could make way for a turn­around sto­ry this fall

Illustration: Assistant editor Kathy Wong for Endpoints News

In drug de­vel­op­ment, the run­ning joke is that you can con­duct well-con­trolled ex­per­i­ments, with a place­bo arm and a study drug co­hort.

“You can’t do that in fi­nance,” as Karuna Ther­a­peu­tics CFO Troy Ignelzi says.

As the clock struck 2022, that be­came glar­ing­ly ob­vi­ous to an en­tire in­dus­try.

The mas­sive tail­winds that fed the sails of hun­dreds of biotechs dur­ing the first 18 months of the Covid-19 pan­dem­ic end­ed up stalling around the be­gin­ning of 2022, caus­ing dozens of pub­lic and pri­vate drug de­vel­op­ers alike to en­act lay­offs, prune their pipelines, shut­ter and search for al­ter­na­tives. The Covid im­pact — es­ca­lat­ing the in­dus­try’s mis­sion to bring new treat­ments and vac­cines to the world in record time — led to a “sug­ar high,” says Ar­da Ur­al, EY’s Amer­i­c­as mar­ket leader for life sci­ences.

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