20th of May 2020, Utrecht – This month ttopstart has interviewed 50 European life sciences companies on how they are impacted by and have responded to the COVID-19 crisis. In the report the results are discussed and translated into recommendations. Jasper Levink, director of ttopstart: “Whereas some life sciences companies seem to benefit from the pandemic, many are facing severe delays, funding issues, and are at risk of default. With this report we provide useful recommendations to these companies. They could benefit from quickly finding the right investors, partners, and making strategic switches to adopt to the corona-induced situation.”
Results: impact of COVID-19 on life sciences industry
A summary of the results:
- Nearly two-thirds of the companies interviewed expect delays in the development of their lead product due to the COVID-19 crisis. The average expected delay is 6-months.
- About half (51%) of the companies expect to require extra funding. Most of the firms in need for additional funding require an amount between €100.000-€400.000, and it is not rare for companies to require an amount of even more than €800.000. Interestingly, these data also imply that an equal amount of companies does not face a financial setback.
- Our data shows that the impact of the exit value of companies is very mixed; A quarter of the companies expect their exit value to be influenced negatively whereas about an equal amount of them expects a positive effect, no effect, or find it hard to make a prediction. Of the firms older than 11-years 21% are at risk of default (compared to 42% of younger companies) and only 36% of them require extra funding due to the COVID-19 crisis (compared to 63% of younger companies). This may indicate that older firms have a higher chance of surviving this crisis.
- A wide range of strategic moves in response to the crisis are being made. Amongst financial strategies, reduction in operational costs and postponing investments are the most common. Interestingly, nearly a third of the interviewees have responded to the pandemic by switching to infectious diseases or other COVID-19 related areas.
- Many companies are forced to revise their R&D and funding strategies while facing future uncertainties. The long-term effects of postponing investments could be the most detrimental for biomedical innovation.
- Nearly 60% of the companies applied for the governmental support measures offered. Interestingly, only a quarter of the respondents in need of extra funding attempted to raise this via EU grants.
For the full report visit: https://www.ttopstart.com/news/results-survey-covid19
Date: 20 May 2020