Coronavirus Update: Life Sciences & Biotech Industry
By Jeffrey Solomon, Partner-in-Charge, Assurance Services, Connecticut & Michael Brooder, National Technology & Life Sciences Leader
- The coronavirus has further exposed China’s importance within the pharmaceutical supply chain and U.S. dependence on foreign sources for pharmaceutical manufacturing. Reliance on foreign sources makes U.S. drug manufacturers especially vulnerable to disruptions in the supply chain due to COVID-19.
- Congressional lawmakers introduced a bill that would contribute $100 million to develop domestic drug manufacturing.
- Medical laboratories are ramping up coronavirus testing following delays due to a widespread manufacturing problem that stalled testing for most of February and to defects in many of the initial coronavirus test kits that have resulted in flawed results.
- The life sciences sector is in the spotlight as teams are at the forefront of working toward treatment and vaccination options related to the novel coronavirus.
- Medical devices and supplies are in short supply across the country. Specifically, protective safety clothing including masks, shields and medical scrubs. In addition, as we have all heard, ventilators are in short supply. Medical device manufacturers are ramping up production in response to an increased demand for supplies. No single company will be able to fill the current demands of global healthcare systems, and more opportunity for collaboration exists than ever before. Further, biological safety containment is paramount and not available at all research facilities. Along such lines, Pfizer recently issued a five-point plan calling on the biopharmaceutical industry to join the company in committing to collaboration to combat COVID-19.
- Leading regulatory bodies are advising pharmacies and health systems that receive products to set up staging or hand-off areas for deliveries to enable a form of “contactless” delivery.
Communicate throughout the Supply Chain
Communicate frequently and directly, both upward and downward through your supply chain. Understand the potential financial impacts on your company, from vendor supply and production to employees and future sales, as well as the financial stability of your customers.
Gauge your Access to Capital
Understand how current disruptions will have a financial impact on your company. With market instability and uncertainty, access to venture capital might be impacted in the coming year to years. If you are primarily dependent on a few sources of capital to facilitate development, engage in frequent conversations with them to assess the risk that funding could disappear or be impacted in any significant way.
Stay Attuned to the University Systems
With strong industry ties to academic institutions, university closures or delays could cause short-term delays in research and trials and could alter the supply of workforce resources. Maintain communication with those institutions and continue to collaborate as feasible. Communicate any delays to stakeholders.
Watch for the Emergence of New Startups
On the heels of this rapidly changing environment we live in, innovation will continue to play a key role. We are currently seeing the tech giant Microsoft offering a Healthcare Bot service to organizations on the frontline of COVID-19 to help screen patients. As another example, a new app could have the capability to detect whether you have crossed paths with someone infected by the virus. It would share information about your movements while protecting individual privacy and could allow officials to locate coronavirus “hot spots.”
For more information about the impact of the coronavirus on the life sciences & biotech industry, please contact:
Michael Brooder, National Technology & Life Sciences Leader at 860.760.0610 email Michael
Jeffrey Solomon, Partner-in-Charge, Assurance Services, Connecticut at 203.781.9725 email Jeffrey
Coronavirus Resource Center
Have more questions about the impact of the coronavirus on your business? Visit Marcum’s Coronavirus Resource Center for up-to-date information.