In a high-interest-rate environment, cash is king. All biotech companies will need to continue spending to finance their R&D. But debt-fueled spending is becoming expensive. And selling stock will just dilute current shareholders. All companies will find it hard to deal with this, but none more so than companies with negative earnings and little cash on hand. While some companies can delay the inevitable for a surprisingly long time, gravity is likely to catch up to unprofitable companies eventually.

The biotech stocks to avoid buying today are those that have no path to near-term profit and not enough cash to survive the short term. They will also be debt-laden, and will find it hard to finance that debt in today’s environment. Finally they are often running a negative loss from operations. Some companies can afford big losses since they’re financing rapid expansion. But others companies are running a deficit and hoping they can spend their way into profitability. In the current climate, that’s unlikely to pan out.

A good investor needs to avoid losses as well as capture gains. That means selling stocks that may have potential but have no path to reach it. So for an investor looking to cut their losers, here are some of the worst biotech stocks to own in today’s environment

Amyris (AMRS)

Amyris (NASDAQ:AMRS) was a stock I once pitched as a disruptor, and while I still believe in its tech, its business has not lived up to its potential. Amyris uses synthetic biology to produce products. This means transforming organisms with novel genes and letting them work as little factories pumping out products. The promise is that these organisms can make things like drugs or additives more cheaply than traditional synthetic or purification pathways. But the promise isn’t being lived up to.

Amyris’s 2022 earnings show it ended the year with more debt than assets. It had $64 million in cash and cash equivalents, but much of that likely came from selling $50 million worth of stock at the end of the year. Diluting shareholders may save the company, but it’s not good for an investor. And “save” is being generous, that $64 million in cash is far less than the $528 million they lost during the year. In fact, with just $270 million in revenue, Amyris spent almost $2 for every $1 it brought in. The final nail in the coffin is that full-year revenue actually decreased from 2021.

What’s clear is that Amyris is burning investor’s money to maintain itself, and that can’t last forever. 2022 was not a good year, and 2023 isn’t looking to be much better. Amyris’s process is still technologically interesting, and I hope someone can use what they’ve learned in the future. But it is just not a company I’d invest in.

Ionis Pharmaceuticals (IONS)

Ionis Pharmaceuticals (NASDAQ:IONS) is a drug development company focused on using antisense RNA to cure diseases. Biologically speaking, “you are what your proteins are,” and most genetic diseases are caused by some proteins acting in ways they shouldn’t. Antisense RNA will bind to mRNA, which produces those proteins and prevents them from being made. This should prevent the symptoms of the disease, and Ionis has several drug candidates created from this pipeline.

But while the technology is sound, there is reason to doubt the company’s viability. The 2022 earnings report shows $276 million in cash and cash equivalents. That’s about equal to its 2022 net loss of $269 million. It has $1.71 billion in short-term investments which could be quickly turned into cash. But those investments are less than its $1.96 billion in liabilities. Ions has a debt problem, and only just enough cash for another year at its current rate.

And it gets even worse. The loss from operations was $410 million, and was offset by selling $149 million in real estate. In terms of operations, it doesn’t even have enough cash to last a year, and will have to keep selling assets to stay solvent. That’s not a strong position, especially with revenue steadily decreasing in 2021 and in 2022.

So Ionis is losing revenue, losing money, has a debt problem, and many of its clinical trials are still a long way from completion. Without a major change, it has very little path to profit, and very little upside for investors.

Aclaris Therapeutics (ACRS)

One of the most interesting areas of drug discovery is in the human kinome. The kinome consists of proteins which change the activity of other proteins, turning them on or off. Because so many diseases come about when the kinome is unbalanced, many drugs exist to target these diseases. The kinome is also the domain of Aclaris Therapeutics (NASDAQ:ACRS), and despite much promise, this is a company I’d stay away from.

The promise of Aclaris is that since the kinome underlies so many diseases, then it is a rich vein for finding drug targets. The reality is that Aclaris has faced high-profile failures and an acute lack of successes. Aclaris is lacking in revenue, making just $25 million in licensing and contract research in 2022. Most worryingly, it lost $87 million in 2022 and ended the year with just $45 million in cash and cash equivalents.

The one bright spot for Aclaris is the overall lack of debt, and the marketable securities it owns which can cover its cash deficit for now. However securities can fall in price for a company just as they can for an investor. And if interest rates continue to rise, who knows how much Aclaris will get for its securities. But Aclaris will need to last a long time if it is to survive. It doesn’t have any drugs in Phase 3, and that phase will take a long time and has no guarantee of success.

Aclaris needs to survive a long time if it’s ever going to get revenue. Right now that survival looks difficult. I’ll root for any drug company to succeed, I always want more treatments on the market. But this is a biotech stock to sell, not to buy.

On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.