Life science companies have been – and remain – at the forefront of the global response to COVID-19, which has led to upheaval within the industry itself. Falling revenues necessitate further cost optimisation efforts, as well as revisions of existing financial models and forecasts. Government support programmes are available, but it may be confusioning as to how and when to best apply them. Funder support, often from private equity and banking relationships, is needed to restructure finances and execute on business recovery plans. That, in turn, can lead to new financial and tax implications and a need for realignment.
Updating, or wholly re-inventing, internal processes, strategies, financial setups, and, in some cases, even solutions, is the order of the day for many.
Some aspects of life sciences companies can benefit immediately from an agile approach and increased digital transformation, such as upgraded work-from-home initiatives. Other aspects, including the often-lengthy path to new products and solutions, need more development and time. Recasting business plans will be among the main priorities that companies will look to address.
Cost optimisation will, for some, be complemented by opportune investments and acquisitions to grow revenue streams, consolidate market position or expand service portfolios.
Immediate questions many companies will ask themselves include: what changes will be temporary, and which will be longer lasting? How can we increase resilience to similar incidences in the future? What new opportunities will arise, and how can we best take advantage of them?
Throughout the reaction phase that has followed the spread of Covid-19, management teams are tasked with a need to make critical decisions and find good answers to questions such as those above. Most – or all – of the decisions involve new, unchartered territory, and taking a wrong turn can have lasting long-term consequences.
Thanks to our global BDO team of experts, counting representatives in more than 160 territories, we are well positioned to help you navigate the fallout of Covid-19. Our Global Life Sciences team draws on its industry expertise, experience, and connections to help businesses from fast-growing, young start-ups to the largest multinationals to drive growth and manage risks.