Biotech company Pharming has a total of $45 million in an account with the collapsed Silicon Valley Bank (SVB). That is about a quarter of the Leiden company’s cash. Due to the uncertain situation, Pharming does not know how much of that 45 million dollars it will get back or when.
Pharming’s assets were held in accounts with SVB and its British branch SVB UK. The American accounts had $26 million and the British $19 million. Different insured amounts apply to both accounts. Pharming knows for sure that it will get $250,000 from the American account and about £85,000 from the British account. That’s over $100,000.
Whether Pharming can recover more or all of its assets depends on any settlements from the US and UK governments for a sale of SVB to another bank. The US regulator FDIC has already announced that it will pay account holders with uninsured assets a percentage of their money next week. But the American newspaper The Washington Post reported that if no buyer can be found, the US government would want to insure all assets. Finance Minister Janet Yellen already said that a rescue of SVB itself is out of the question.
The British government has indicated it will develop an emergency support package for startups that have lost their assets with SVB. That should allow them to continue paying wages and other ongoing costs. More details are expected on Monday.
Pharming itself said it would make “all possible efforts” to recover the funds in the US and the UK.
SVB collapsed on Friday after a bank run had occurred. The bank had invested a relatively large part of the money under its management in low-interest government bonds. But due to the deteriorating economy, many SVB customers needed more money available. The bank’s only option was to sell the government bonds at a loss, so the board tried to raise funds with an equity issue instead. But that led to turmoil in the stock market, which spilled over to customers. On Friday, they attempted to withdraw $42 billion from their SVB accounts before the bank collapsed and US regulators took control.
Reporting by ANP