Investors hoping for a quick turnaround in battered life science companies like Illumina (Nasdaq: ILMN), Pacific Biosciences (Nasdaq: PACB), and Affymetrix (Nasdaq: AFFX) may want to consider new information that suggests the next twelve months could be just as bad, if not worse. A recent survey from GenomeWeb and Mizuho indicates that research labs are battening down the hatches in expectation of poor funding trends and may well be spending less money (and spending that money differently) in the near future.
The Money Tree Is Looking Bare
For all of the talk about how life science discoveries in fields like genomics and proteomics has, is, and will influence Big Pharma and biotechnology, the reality is that it is not companies like Pfizer (NYSE: PFE) and Novartis (NYSE: NVS) that really make up the bulk of this sector's customer base. Life sciences is really an academic lab market – and those labs depend upon the federal government for an exceptionally large percentage of their funding needs. With stimulus spending in the past and the likelihood of lower funding levels for organizations like the National Institutes of Health and sub-institutes like the National Cancer Institute becoming more and more real, the situation is starting to get a bit scary.
Read the full piece here:
Survey: Life Sciences Could Be In For A Rough Year
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