The biotech cash crunch is a global phenomenon, but historically US and European companies have responded differently. US firms are far quicker to reduce cash burn rates through layoffs. In Europe, where the political pain of layoffs can be extreme, companies generally try other solutions first—spin-offs, for example, or trade sales. Then any necessary layoffs become the responsibilities of the new owners. And when European companies do need to make layoffs, their US operations are often the first to feel the knife—the case, for example, following the merger which created Aventis SA[See Deal].
But unlike in previous biotech downturns, the current financing drought in capital markets is so acute that European firms are...
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