Biotech sits at the blurred boundary between technology and science: an industry at the cutting edge of innovation, supercharged by venture capital funding, and utterly reliant on real, physical experiments — unlike much of the rest of the tech industry. In the parlance of biologists everywhere: biotech is an in-vivo business. Biotechs may be in Silicon Valley, but their work can't happen in silico.

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"In my biotech lifetime, I've not seen something of this magnitude. Even 9/11 didn't cause business disruption in this way," said Venrock Ventures partner Racquel Bracken, who is also the CEO of seed-stage microbiome biotech Federation Bio, based in South San Francisco. She has 15 employees, all of whom must go into the lab to run their experiments on living cells as well as animals.

As it became clear that strict social distancing measures were needed in order to slow the spread of coronavirus, Bracken and biotech leaders across the globe began scrambling to come up with plans to protect their employees and communities while managing to keep their science going, hit their funding deadlines — which are reliant on the delivery of data that can only be generated in laboratories — and keep the lights on.

Not all will. Investors, trade groups and CEOs Protocol spoke with over the past few weeks all agree that when this crisis ends, the world will likely have fewer biotech startups in it, even as the COVID-19 pandemic itself reminds us of why innovative health companies are so important.

The newest companies, those at the seed-stage, may be the worst hit. Many are managing to keep the essential science going, but they will all have to deal with the repercussions of interrupted experiments, potentially missed deadlines, lost data and the looming reality that crucial fund-raising rounds may not go as planned.

"The guys we're hearing from the most are the small, early-stage biotechs," said Oliver Rocroi, vice president of the California Life Sciences Association, a trade group that represents big pharma, academic research institutions, and between 300 and 400 small emerging biotech companies in the state.

They're calling because they are worried and confused, and so is Rocroi. Under California's sweeping state-wide shelter in place orders, it's unclear if research and development stage companies are allowed to operate as normal. Bay Area-specific shelter in place orders exempted biotech companies, but the state order is much less clear. Rocroi spent the past week lobbying the California government to clarify whether companies like Federation Bio, which is not working on anything related to COVID-19, are allowed to be operating.

"The argument that we have tried to make with the governor's office is to consider the economic downstream effect," Rocroi said last week. "If you don't allow research and development across the board, what does that do to venture capital, to intellectual property? What does that do to the economy two, six months from now, or two years from now?" Innovation could grind to a halt, as the smallest, riskiest companies are often the most cutting edge.

Across the world, the U.K.'s biotech community is having all the same worries. "These are companies that are living on small sums of money up to that next funding round, which is usually less than a year," said Alan Barge, a biotech investor with Delin Ventures in the U.K., which only does seed-round investing. "It is a pretty hand-to-mouth environment where unless you generate the next piece of data against which you're going to raise funds, the whole survival of the company is in question."

One of Barge's promising portfolio companies, Turbine, a cancer therapeutics startup that uses AI modeling, had been preparing to raise a Series A round later this year. Now Turbine's founders can't get meetings on the books with the big investors. Barge is preparing for the reality that his fund may need to extend seed-funding until after the crisis to buy companies like Turbine more time. "It depends on how much money they need," he said, "but obviously we're not going to just pull the plug and just allow them to die for the want of a few hundred thousand dollars."

Bracken, who is in the position of running a seed-stage biotech and also being an investor in others, said that experienced health care investors will not drop a company just because it misses a single deadline because of coronavirus. Investors will look "at the totality," she said. "Is this a company and team that has been delivering? If yes, then I think funders will be amenable to cutting some teams some slack."

Johannes Fruehauf, who runs Lab Central, a large lab incubator space in the biotech hub of Cambridge, Massachusetts, that has 100 early-level companies in his space, certainly hopes so. "But I wouldn't really count on that," he said, especially if this goes on for months.

"These are of course business decisions that [VCs] have to make," he said. "Yeah, on a personal level everyone does understand that these companies are facing adversity that's not predicted and not caused by themselves, and that the team is as good as it was when we invested and the science is as good as it was when we invested, so hopefully that'll sway investors to be somewhat forgiving. But the reality of timelines are also harsh and real."

When COVID-19 first began traveling through Boston and Cambridge, it hit the close-knit biotech community there particularly hard after a single meeting of biopharma executives became the source of community transmission. That led Fruehauf to act fast, limiting the numbers of people allowed in labs at the same time, closing down common eating areas, removing once-normal perks like bowls of fruit. As the crisis has escalated, Fruehauf has continued to update best practices and stayed in constant contact with the scientists in Lab Central who are trying to navigate the crisis.

So much depends on the luck of timing for these companies. Any teams caught in the middle of expensive clinical trials, or who are running long-term animal experiments, will be hard hit if those studies are interrupted. As will those transitioning to clinical work. "When you go from preclinical to clinical, everybody is within a year of a major inflection point," said Comet Therapeutics CEO David De Graaf, whose company is headquartered in Lab Central. Those are the companies he's worried about most if work is unable to proceed for a long time.

Comet is in a better position than some to weather location-specific work stoppages, thanks to built-in resiliency in its model. The company, which works on drugs for metabolic diseases, falls into a growing trend of biotechs that outsource some of the wet-lab bench science to contract research organizations, or CROs, in other locations. Comet does some of its critical science in house, and the rest is contracted to labs all over the world.

Some of those were in China, so De Graaf's team actually felt the disruption of COVID-19 long before it came to the U.S. When labs they'd contracted with for experiments in China shut down, De Graaf scrambled to find other CROs to deliver the data. Some of those are in Europe and the U.S. Where is safe in a global pandemic? Nowhere, but at least for Comet and companies like it, when one location is shut down, there are others that can remain operational. And as with everything, it's all about timing. Labs in China are now opening back up while the U.S. is locking down further.

This kind of model is partially why people like Boston-based Atlas Ventures partner Jason Rhodes isn't worried that COVID-19 may threaten the whole industry. "We take this very seriously, but I don't think it makes us in any way, I want to say, kind of pessimistic about the future," he said.

But not all startups are as distributed, or can be. Much highly technical, experimental work can't be outsourced; the whole point is that no one but the scientists at the company know how to do it. That's the value of the company. "For some companies, it's the kind of situation where you can't go to a CRO even if you wanted to. The CROs don't have the expertise to run the models," Bracken said.

This applies to pure academic research, too. As shelter-in-place orders extend, much pure research is on hold. Harvard ordered all labs to shut down normal operations and maintain just skeleton crews, with the exception of groups working directly on COVID-19. Universities across the country did that same thing. The UC system advised laboratories not working on coronavirus directly to wind down active experiments.

A San Francisco-based biotech executive who spoke on the condition of anonymity because he was not authorized to speak to the press said his company is virtually shut down. Of the hundred or so employees the company has, the only scientists working in labs are those caring for the animals (a necessity facing any biotech that has research animals). Experiments are not continuing, and though the therapeutics company isn't in the seed stage, its next funding round depends on data that should be coming in right now.

All biotechs now are facing hard questions about what work can continue. The answer is easier, in a way, for companies that are working directly on COVID-19. And their sense of mission is incredibly strong, but they, too, have had to adjust their operations.

At 10xGenomics, in the Bay Area, work continues manufacturing crucial tools that government, private and academic labs use to study the disease. Now is not the time for CEO Serge Saxonov to ramp down; what's needed is a ramping up. "Internally, we've had to adjust our production and prioritization," Saxonov said, to focus his team on making the tools that labs need most to understand COVID-19, like their immunity profiling solution, which can help speed up research into which antibodies best fight the virus.

"It is imperative for us to keep the business going, and even in many ways to accelerate and do things faster than you might have done before, because this is an increasing emergency around the world," Saxonov said.

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To do that safely, 10XGenomics, which went public last year, has moved to shifted schedules at the factory, limited how many people can be inside at a time, adjusted customer support people in the field to be largely remote, and added even more protective gear and cleaning than was standard before.

In Cambridge, Fruehauf has instituted similar policies at Lab Central. "We are laser focused on providing mission critical business continuity for our companies," he said, including ones like HelixNano, which is working on a novel vaccine approach for COVID-19. "The solution for this crisis will likely come in the form of rapid testing, vaccine development, antiviral therapies from one of these nimble and innovative biotech companies."