FirstFT: Biotechs face cash crunch

Dozens of biotech companies are running low on cash and face an uphill struggle to raise funds after “tourist” investors who snapped up their shares during the pandemic abandoned the sector.

The groups, most of them lossmaking, raised a record $32.7bn in initial public offerings over the past two years, according to Refinitiv data.

But 83 per cent of recently listed US biotech and pharma stocks are trading below their IPO price. Biotech groups that listed in 2021 are trading on average 37 per cent below their IPO price, compared with a 22 per cent fall for all newly US-listed companies.

Many companies raised money through IPOs with the expectation that they would be able to tap investors for funds in future share sales. But their ability to do so has been hampered by a market rout as retail investors and generalist money managers turned sour on biotech stocks.

Thanks for reading FirstFT Europe/Africa. Do you have any feedback on the newsletter? Let me know at [email protected]. Here’s the rest of today’s news — Jennifer

Five more stories in the news

1. UK reliance on gas imports to increase to 70% by 2030 Britain’s gas imports will increase dramatically over the next 30 years, according to official forecasts, even if all of the existing North Sea reserves are exploited. The analysis by the Financial Times comes as the government faces growing pressure from environmentalists to halt domestic drilling.

2. European scientists’ nuclear fusion breakthrough Researchers from the Eurofusion consortium have set a record for the most energy generated from nuclear fusion, the latest breakthrough in a decades-long effort to produce power by harnessing the reaction that powers the sun.

3. Turkey to target ‘under the mattress’ gold The country will expand its effort to lure savers back to the lira next week with a scheme aimed at drawing some of the estimated $250bn worth of gold kept by Turks in their homes into the banking system, the finance minister told investors in London.

4. US: Russia still ramping up military activity US officials have warned that Russia has continued to ramp up military activity near the Ukrainian border despite diplomatic efforts to defuse the crisis. “The numbers continue to grow. We maintain that [Vladimir Putin is] north of 100,000 [troops] for sure,” said John Kirby, the Pentagon spokesperson.

• Read on: Japan is to divert liquefied natural gas to Europe in an effort to soothe fears that a conflict would disrupt supplies.

• The FT View: Beware comparing Ukraine with Finland.

5. SEC to bolster disclosure rules for PE and hedge funds The Securities and Exchange Commission is seeking to compel hedge funds and private equity groups to disclose quarterly performance and fees charged to investors as the agency pushes back against activities “contrary to the public interest”.

Coronavirus digest

• The UK Metropolitan Police said it would question more than 50 people in its investigation into lockdown-breaking Downing Street parties. Boris Johnson plans to end the legal requirement to self-isolate after a positive Covid-19 test as he moved to scrap remaining restrictions in England later this month.

• AP Moller-Maersk said it expected global supply chain woes to ease in the second half of the year.

• Stronger-than-expected results from Uber helped offset a knock in rideshare demand caused by Omicron, sending shares up in after-hours trading

• The head of the Mandarin Oriental hotel group wants his executive team to be temporarily based outside Hong Kong because of strict coronavirus restrictions.

• Opinion: A malaria theory known as the “rebound effect” adds nuance to the debate over how to protect children against Covid, writes Anjana Ahuja.

• The Austrian village of Ischgl made headlines for all the wrong reasons at the onset of the pandemic: as a superspreader ski resort. Can it reinvent itself?

The day ahead

UK-Russian foreign ministers meet Liz Truss will attempt to project a tougher stance than French president Emmanuel Macron when she meets Sergei Lavrov in Moscow. Macron said another session of talks involving Russia, Ukraine, France and Germany will also be held in Berlin.

Opec oil market report The monthly oil report comes a week after Opec+ agreed to boost its production quota for the eighth consecutive month.

US inflation January figures are expected to show the US consumer price index grew 7.3 per cent year over year, a 40-year-high, while core CPI increased 0.5 per cent on the previous month compared with 0.6 per cent in December. Economists will also be looking for signs that employers are reluctant to lay off staff in initial weekly unemployment benefit filings.

• In Europe: Brussels publishes eurozone economic forecasts, while the Royal Institution of Chartered Surveyors publishes its monthly UK residential market survey. Andrew Bailey, Bank of England governor, will deliver a speech at TheCityUK Annual Dinner. (FT, WSJ)

Corporate earnings Unilever’s full-year results will face scrutiny after its attempt to buy GlaxoSmithKline’s consumer health division and news that activist fund Trian Partners has acquired a stake. Other companies reporting include AstraZeneca, Bombardier, Coca-Cola, Credit Suisse, Deutsche Börse, Kellogg, PepsiCo, Philip Morris, Siemens, Société Générale, Twitter, Thyssenkrupp, Total, Western Union and Zurich Insurance.

What else we’re reading

How Liz Truss transformed herself The UK foreign secretary’s uncompromising economic positions and distaste for political correctness make her a divisive figure. But even critics who see her as Thatcher-lite said counting her out as a potential prime minister may be a mistake.

#MeToo shakes up France’s presidential race Conservative candidate Valérie Pécresse said she nearly cancelled a live interview on one of France’s most popular television shows because of sexual assault allegations against a host. The incident showed how women’s issues could play into the battle to unseat Emmanuel Macron in April.

Siberia’s crypto boom is made of ingenuity and defiance Fuelled by cheap electricity and Chinese hardware, households across the region are furiously mining cryptocurrency. But a crackdown looms: Russia’s central bank has proposed banning most crypto market operations. What would it mean for those who profit from it?

It’s time for us all to speak more like the Dutch Brits often use words so riddled with ambiguity that the sense can only be understood if the speaker and listener share an implicit cultural frame. The Dutch, however, tend to speak in a far more direct and logical way, with fewer hidden meanings. British workplaces should take heed, writes Gillian Tett.

Turmoil at Peloton makes it a target Amazon and Nike are among several potential suitors that have hired advisers to explore an acquisition of the home fitness company, which has become more expensive after its share price spiked 50 per cent since Friday. But John Foley, Peloton’s cofounder, has staved off approaches and retained control.

Thanks to readers who took our poll yesterday. Ninety-one per cent of respondents said under-13s should not be using Instagram.

Style

It is an uncontroversial, but nonetheless interesting fact, writes Robert Armstrong, that Jeff Bezos is a terrible dresser. He shuns the simple uniform of the super-rich but his goofy, slightly crass style clashes with the huge role his choices play in so many lives.