Attended: What’s New/Next for the Biopharmaceutical Industry?
A few weeks back, I attended a Licensing Executive Society’s event called “The Future of the Biotechnology and Pharmaceutical Industry.” It’s taken me a while to get to my notes but here they are, finally.
The well-attended event was formed around a panel of speakers that included biotech allstar Dennis Purcell, Richard Sperber and Graham Jones
Dennis Purcell
Mr. Purcell started out by saying 2009 was a pretty good year for biotech, small caps were up, and there were some big biotechnology company breakouts. On the downside, there were no IPOs and rewards for investors were elusive.
He predicted big changes in Venture Capital over the next few years because VCs are now funding biotech companies to help sustain them. As a result, they can’t place as many bets, and they can’t rely on IPOs or Big Pharma deals as exits. He said the VC industry could shrink by as much as 50% in the next few years.
One of the main reasons is that M&A and licensing have converged and there are fewer acquisitions. As a result, the VCs are trying to figure out what kinds of biotech companies to build – companies that are developing a product versus companies that are developing pipelines of products.
Mr. Purcell said it’s hard to figure out what the pharmaceutical companies want these days, especially since big pharma has gotten smarter about licensing deals.
The big issue for the biotechnology companies that survived last year is how will they make it through the next few years. Sustainability is a huge issue. And the general investor doesn’t feel the need to be in biotech.
An audience member asked Mr. Purcell how early his company would go into a company and he answered, “Later.” Ainsling is interested in platforms that will spin off products but their recent focus has been on orphan drugs. He warned it’s hard to make money off of early stage companies and said there are less dollars available for those early-stage companies. He also mentioned reimbursment is a huge issue for all biotechnology companies and too are looking at the reimbursement big picture.
Richard Sperber
Richard Sperber, started by joking “It was the best of times, it was the worst of times for the industry but everything changed on December 31, 2007. IPOs started to mean ‘I Postponed the Offering’… Private financing dried up… 200-300 companies found themselves with less than 1 year of cash… Partnering slowed to a trickle… Pharma companies stopped calling back. And biotech became a buyer’s market, going from, we want phase 2 data, to we want a filed NDA to we don’t want to talk to you until you’re on the market.”
He reminded the audience that partnering in biotech is enormously important. Pharmaceutical companies need partners. And, thankfully, all investment is cyclical.
When asked when companies should be thinking about partnering? Mr. Sperber answered, “When you have Phase 2 data.” When asked if there were too many leads and too few investors? he answered, “It’s a buyers market and pharma can wait. There is a lot of junk out there and big pharma can wait but don’t forget, big pharma needs biotech.”
When asked, “Who is funding the early stage?” Mr. Purcell stepped in answered, “bigger syndicates…. but fewer deals, bigger deals.” An audience member from Pfizer countered,”Pfizer is funding early stage research.”
Purcell offered that half of the conversations at this year’s J.P. Morgan Biotechnology Healthcare Conference were around outlicensing. To which an audience member pointed out, “Compounds could be outlicensed, then developed offshore.”
Gerard Jones, Ph.D.
Dr. Jones spoke about biosimiliars and said biosimiliars are defined as those compounds that are usually protein-based, and created via a biological method after the patent on the original compound as expired. These compounds – like Amgen’s recombinant epoetin alfa, Epogen – are highly effective and make up 50% of all new drug registrations. As these compounds come off patent, their generic versions will represent an $80 billion market. Biosimilars he noted represent the point when the golden age of biotechnology turns platinum.
The biosimilars discussion was very interesting because the intellectual property around biosimilars focuses on process and compounds creation.
Legislatively, Dr. Jones mentioned we’re getting closer to 12 years of exclusivity but generic biosimilar manufacturers will need alternate strategies to be successful. One other barrier to entry for generics manufacturers will be generic company must use the innovator drug as reference for their NDA application.
The FDA has the biosimilars issue on their radar screen and has hired 1000 new inspectors. EMEA is having a harder time on this and China and India are leading innovation in this space. Mr. Purcell mentioned that BIO is happy with the 12 year patent protection.
I enjoyed the panel, especially Dr. Jones insights. I walked away feeling very humbled in my knowledge re: biosimilars.
Kudos to moderator Arnold Burstein and organizer Sandra Holtzman.
