Zombie contagion: protecting biotech's future from within

Beyond the financial toll, these undead firms stifle innovation and contribute to market stagnation. They occupy valuable market space and monopolize talent, making it incredibly difficult for genuinely novel startups with viable solutions to gain traction. Their collective sluggishness casts a negative halo effect over the entire industry, creating a perception of overall unprofitability or lack of progress. Perhaps most disheartening, talented individuals often get stuck in these companies, their skills and ambition wasted on ventures going nowhere, ultimately hindering the very progress biotech aims to achieve

A high burn rate coupled with stagnant or declining revenue or pipeline progress is another flashing red light. You might also notice difficulty securing follow-on funding from existing, once-eager investors, indicating a loss of confidence. Indefinitely delaying critical clinical trials or product development phases often points to deeper, unresolved issues.

Beyond the numbers, operational and strategic indicators are just as telling. A lack of clear strategic direction or constantly shifting goalposts signals internal disarray. High employee turnover, especially among senior leadership or key scientific personnel, suggests a sinking ship.

Perhaps most concerning is no discernible progress on promised breakthroughs or product launches; the company just exists without delivering. Their excessive focus shifts to merely 'staying alive' rather than achieving meaningful objectives. Finally, a pervasive resistance to difficult decisions or a clear pivot often seals their fate, trapping them in an unsustainable holding pattern.

Next, strategic clarity and iteration are vital. Define clear, measurable goals and timelines for every project and product. Regularly evaluate progress against these goals, holding yourselves accountable. Embrace honest self-assessment and a willingness to pivot or re-evaluate your core strategy when the data demands it. Establish clear 'kill points' or decision gates for projects; sometimes, ending a non-viable path is the smartest move.

For your investors, transparency is key. Maintain open and honest communication with them, even when progress is slow. Set realistic expectations from the outset. Remember, investor confidence is built on trust and demonstrated progress, not just your continued existence.

Finally, while not a silver bullet, understanding the role of insurance is part of overall financial prudence. Coverages like D&O, E&O and cyber insurance can mitigate specific risks, but they are not a substitute for sound business practices. Proper insurance planning supports a healthy operation, but it won't resurrect a fundamentally failing business model.