Bioworld Insight

Biotech firms have long borrowed ideas from the high tech world. The venture-backed start-up business model on which the entire biotech industry is based came from high tech, and it has served both industries well despite their very different timelines and cost structures. Even so, current capital constraints have put "unprecedented strain" on biotech business models, according to Ernst & Young's Lead Analyst Gautam Jaggi, requiring a rethink of everything from company founding to drug development to healthcare delivery.

Diseases that can develop resistance – in practical terms, cancers and some infectious diseases – rather quickly reveal the limits of targeted therapies.

Cash is often biotech's most precious resource, but when a recession hits and capital markets seize up, it can be hard to come by.