2021 saw record venture capital investment and IPO activity in biotech. One hundred forty-seven companies went public and valuations soared. In 2022 only 25 companies went public and most biotech index funds are down more than 50% from their peak in February 2021. Fierce Biotech’s layoff tracker says 120 biotech companies have laid off workers in 2022. Are biotech and pharma layoffs a given for 2023?
“What you’re now seeing is filtering of the haves and have nots, between companies that have great assets and pipelines with the ability to raise capital, and companies with bleaker prospects that struggle to raise capital and stay in business,” said Michael Yee, a Jefferies biotech analyst. For a decade there was excitement over new technologies like cell therapy, gene editing and messenger RNA. Recent excitement has centered on promising drugs for obesity, psoriasis and liver disease. Eisai and Biogen’s new Alzheimer’s drug is raising hopes in the industry that there is some hope in treating this difficult disease.
But rising interest rates have opened other avenues to investors for making money and contributed to biotech and pharma layoffs. Political tensions between the U.S. and China, where the industry outsourced manufacturing and drug development, have added to the concern over viable new drugs. The new federal law allowing Medicare to negotiate prices of certain drugs has pharma concerned about how high the discount will go – 30% or 80%?!
THE GOOD NEWS
It doesn’t seem right to call 78,000 layoffs in 2022 in the tech industry good news, but for pharma it has been. Skills in data science and machine learning have been topping recruiter’s wish lists for some time. The movement of AI-designed drugs through clinical trials means an even greater need for advanced analytical talent in the drug development phase. Fastcompany.com reported that, “Between July 2021 and July 2022 J&J posted nearly 2500 AI-related job openings; AstraZeneca more than 1000 AI jobs and Takeda, Novartis and Pfizer each sought to fill 600+ AiI roles.” AI jobs accounted for 75% of all new job postings at pharma companies in July 2022 versus 2% a year prior.
Clinical trials have always generated incredible amounts of data but the amount of data coming from patients already taking approved medications, and the fact that the FDA now says this data can be used by companies to accelerate approval of new uses for the drugs, has only added to the need for analytical talent and has been a counterweight to more biotech and pharma layoffs.
Of course moving from fast and loose tech to the heavily regulated pharma industry can be frustrating for some new pharma employees. The greater amount of remote work in tech is also going to push big pharma to become more flexible to retain these sophisticated analysts.
Interested in hiring or conducting a job search in pharma or biotech? Reach out to Smith Hanley Associates’ Biostatistics and Data Management Executive Recruiter, Nihar Parikh at email@example.com.