SVB insolvency a blow for biopharma sector

After a run on assets, Santa Clara headquartered Silicon Valley Bank (SVB) was closed on Friday by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

SVB held a uniquely outsized position among venture-backed healthcare companies that will take time to replicate, and its collapse only adds more gloom to what has already been a difficult fund-raising environment. Venture-backed health companies account for 12% of SVB’s $173 billion of deposits and 36% of $168 billion in funds held off balance sheets as of year-end.

Biotech companies are racing to assess the damage from the failure.