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More than one in four biotechs that went public in 2020 are trading below cash, according to a new STAT analysis of data from the financial database provider Sentieo.

The indicator — which means a company has more cash on hand than its overall public valuation — seems like further, glaring evidence that too many biotechs raced to market in 2020, a favorite hypothesis among investors whose life science portfolios have plummeted this year.


“For a company to trade below cash is like the investing equivalent of having a very bad credit score. It is a sign that investors believe you are headed towards trouble and are at a risk of being unable to create any value for your investors,” said investor Brad Loncar.

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