It’s not news that VC’s are re-thinking their fundamentals these days. And while those lucky enough to have the opportunity to “re-think”, others have not been so lucky.

Even some of the notable VC’s like NEA and Abingworth have not been able to meet their goals and get an exit from their portfolio companies. Abingworth’s Jonathon McQuitty told Nature Biotechnology that:

“Not only is it taking longer for these firms to get an exit, but also there are fewer potential co-investors than there were previously which means we have to have some pretty hefty reserves. Smaller or less experienced VC firms are going from a situation where fund-raising was merely a bumpy ride to where it simply doesn’t happen. Several funds have missed the wave and are now heading for a wipeout, possibly taking them out of the seed financing game for months or even years.”

Most of the big VC’s are now going for a PIPE (private investment in public equities/companies) only model and leaving the early funding to pharma ventures. Case in point: Serono just recently launched a $54M VC fund while Merck has announced their plans to enter into biologics with Merck BioVentures – their latest news coming from the Insmed deal.

Finally, for those public companies that are out of cash and can’t attract another dime, it’s game over.

Bloomberg recently reported on the crisis in Australia. Almost half of the country’s 130 publicly traded life-sciences companies risk insolvency in the next year. The news comes after Ventracor, a maker of heart pumps, went into voluntary administration after failing to attract enough money to continue U.S. trials of its VentrAsisst LVAD pumps for patients with heart failure.

HIV company Avexa also has problems. Company CEO Julian Chick told Bloomberg earlier this week that it expects cash to dwindle to A$9 million in June from A$20.5 million at Dec. 31.

Chick went on to say:

“We would need a capital injection for our projects to go forward, whether it be through partnership or capital raising, or a combination.”

The pain continues…

Image from cpb.or.kr

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