Every biotech cycle leaves its trail of survivors and casualties.

Others linger—cash on the balance sheet but no conviction. They shuffle forward, trading below value, pipelines thinning, belief gone. These are the zombie biotechs: not dead, but not truly alive.

According to Labiotech, there are nearly 300 Zombie Biotechs today.  They don’t collapse overnight. They fade. Investors disengage. Partners hesitate. Talent walks. Patients stop listening. In the end, zombies aren’t undone only by failed science—they’re undone by the absence of trust. We’ve certainly read and heard these stories and Adam Feuerstein of STAT has been at the forefront of many of them. As I was listening to a recent STAT Readout Loud podcast, I was struck by the honesty, clarity and “no BS” that came from Adam’s conversation with Third Harmonic’s CEO, Natalie Holles. It gave me hope that with the right decisions, we can come out of this turbulent market with a fresh perspective and our reputation intact. So here is what I know:

Science isn’t enough

It’s tempting to think the antidote is data. But even good science can stall if no one believes in the company behind it.

What separates resilience from decay is Reputational Pull—the gravitational force that keeps investors, partners, employees and patients in orbit.

• Investors fund longer timelines when they trust leadership.
• Partners collaborate when they believe in the mission.
• Talent joins when they sense credibility.
• Patients rally when they feel the company is authentic.

Reputation doesn’t replace clinical progress. But it buys time. It sustains belief. It keeps a company alive in the minds of those who matter most.

Third Harmonic’s Paradox

In April 2025, Third Harmonic Bio chose reputation over drift. Despite a healthy balance sheet, the company shut down operations and returned capital.

On STAT’s biotech podcast, CEO Natalie Holles explained it as stewardship: better to exit with dignity than become a zombie. BioPharma Dive framed it as a strategic reset—liquidating assets, protecting shareholder value, and leaving management with reputational equity intact.

The result? Far from being branded as failures, the CEO and team earned more credibility. By making the hard call, they proved discipline, clarity and courage—qualities that investors and partners will remember when backing their next venture.

This is how you sunset a mission without losing the light.

Reputation Creates Resilience

The difference between a zombie biotech and a resilient one isn’t data. It’s belief.

Zombies limp along, technically alive but without trust. Resilient companies survive downturns because their reputational equity sustains them. Investors give them another chance. Partners lean in. Talent stays. Patients keep hoping.

And sometimes, as Third Harmonic showed, reputation ensures that even failure isn’t fatal. Leaders walk away with credibility preserved—and often stronger than before.

The Call to Action for Leaders

For biotech CEOs and boards, the lesson is clear: reputation must be proactively managed as deliberately as science and balance sheets.

1. Tell your story early — Don’t wait for crises to define you.
2. Invest in relationships — Build trust with investors, partners, and patients when times are good.
3. Lead with courage — Hard decisions, made openly, build lasting credibility.

Biotech is powered by molecules but sustained by reputation. Without it, even good science risks zombification. With it, even in failure, there can be resilience, dignity, and a future.

Waterhouse is a brand reputation agency that helps emerging and fast-growth life sciences companies build competitive advantage. For more information email tclevenger@waterhousebrands.com