SVB Failure Could Exacerbate Tight Credit, Drive Biopharma Consolidation

While the immediate danger of depositors being unable to access their accounts at Silicon Valley Bank (SVB) seems to have subsided thanks to the government stepping in to protect deposits, SVB’s collapse may have longer-term implications for biopharma start-ups that could find an already tight funding environment growing tighter.

According to news reports on 14 March, the Department of Justice has opened an investigation into the 10 March failure of SVB, though it remains unclear what the investigation will focus on. The meltdown of what had been a go-to financial institution for start-ups for four decades was triggered by a run on the bank as start-ups pulled out their deposits amid warnings by venture capital firms