The credit crisis could affect the ability of biotech companies worldwide to raise new funding. Although venture capital funding for biotech did not slow last year, some observers believe the criteria for such investments will become stricter and competition between late- and early-stage companies for such funding could increase. Last year, funding for biotech and medical technology companies in the US increased 19.7% to $9.1 billion, as the number of deals rose 9.7% to 862, according to PricewaterhouseCoopers and the US National Venture Capital Association. Other analysts believe that smaller, public biotech companies will be the hardest hit due to a lack of funding available from hedge funds. It is also expected that the number of acquisitions will increase, as venture capitalists seek exits from their investments and pharmaceutical companies, which do not have to rely on debt financing, have cash available.

Source: Nature Biotechnology