Just as is the case for nearly every industry, COVID-19 has impacted biotech and the life science sector in myriad ways. Companies all over the world have launched new research efforts to find effective treatments or a vaccine to combat the virus, and many new companies have sprouted to take advantage of the opportunity the novel virus presents. According to a report from ResearchAndMarkets.com, the lab supplies market, valued at just over $30B in 2019, has reached a record high of $1.7T as of June 2020. In San Diego alone, life science startups captured $1.26B in investments during the second quarter of this year, as reported by the San Diego Union Tribune.
This has led to increased need for lab equipment on the part of companies developing and testing possible vaccines or therapies. Some of these companies, like Sorrento Therapeutics shifted its focus and has made significant progress, while others have quickly emerged to contribute to the effort. Both expanded and new programs require additional equipment, which is not always immediately available from manufacturers. Equipment like extraction and purification systems (e.g. Thermo Fisher Kingfisher Flex), microplate and liquid handlers (e.g. Hamilton platforms), high-throughput Real-Time PCR machines (e.g. Applied Biosystems 7500), and general bench equipment are in high demand. When time is critical, pre-owned equipment can bridge the gap and make essential equipment available quickly – which could reduce the development and testing for a vaccine or treatment.
In other cases, COVID-19 has had a negative impact on the industry, as some facilities have had to quarantine or reduce working staff significantly. This slows their research and increases their time to market, which some cannot afford. Some venture capital firms have understandably become more conservative with their available investment funds. This combination has unfortunately led in some cases to lab closures or downsizing operations to increase working capital and keep businesses afloat, making more used equipment available.
While there is no way to tell how long these trends will continue, we believe that investment capital will still find its way to deserving companies, that companies will continue to succeed (and fail). This will be attributed, at least in part, to the effects of COVID-19 on the economy and our industry.