Biotech insiders fret over funding and image issues at the industry's big bash
Industry insiders had plenty to celebrate at the biotech industry's annual gathering last week. Biotech is growing fast and the annual BIO show which landed this year in Philadelphia drew a record number of attendees-more than 18,000.
But there were funding and pricing issues to fret over as well. And the attendees bumped into a side effect of biotech's growing heft and visibility when several hundred protesters concerned about genetic engineering of food products clashed with police on the a streets outside the Philadelphia convention center.
The fracas left Paris Williams, a 52-year-old Philadelphia police officer, dead of an apparent heart attack.
Inside the convention hall, though, the focus was on finding funding and partners for future deals.
Executives commiserated over the drought in financing for early-stage firms and the prospect of new regulatory hurdles for drug approvals. They also brainstormed on ways of countering criticism of high prices for new drugs.
"The public market is moving away from this industry," says Buck Phillips, a venture capitalist with Vector Fund Management of Deerfield, Illinois, who spoke at a panel discussion along with Ken Moch, CEO of Parsippanybased Alteon and the current chair of the Biotechnology Council of New Jersey. For a biotech to get funding today, says Phillips, "you need to be able to demonstrate you are near revenues."
He noted that the biotech industry is still in its infancy and, from an investor's standpoint, carries plenty of risk. But he predicted that investor interest would return and observed that the pharmaceutical industry "desperately needs new product and new technology" and is eager to do deals. But Moch warned that the loss of funding for early-stage biotechs means that the future flow of new drug products will be curtailed.
But Moch also noted signs of robust health in the industry overall. He said when the BIO show was last held in Philadelphia nine years ago, only 3,000 people registered to attend and just 56 exhibitors displayed their wares. There were 150 at this year's show and attendees came from all 50 states and 60 foreign countries.
On the floor of the exhibit hall the focus was on doing business. A steady flow of interested browsers stopped in at the New Jersey pavilion where 28 exhibitors ranging from companies to research universities to county economic-development officers were ready to pitch the virtues of moving to New Jersey.
There was plenty else to see on the floor, including big pavilions mounted by Pennsylvania, New York and Germany. But New Jersey had a celebrity pressing its case in the person of Albert Einstein impersonator Tony Farma.
Farma buttonholed passersby to tell them that this year was his 100th birthday. Actually it was the 100th anniversary of three of his groundbreaking scientific papers, but most of the visitors were still happy to trade repartee with the famous physicist before moving on to their next encounter.
James Greenwood, a former Republican Congressman from Pennsylvania who in January became president of BIO, the national trade group for biotech, has bolstered its lobbying team by hiring new senior staffers with strong ties to the Bush administration and the majority on Capitol Hill.
Greenwood says one of the biggest challenges the industry faces is educating members of Congress that biotechnology is about more than stem-cell research. He unveiled a new promotional video featuring testimonials from grateful patients suffering from diseases such as multiple sclerosis and cystic fibrosis who had been treated with biotech drugs.
Several speakers agreed that a merger or partnership with a big pharmaceutical company is now the most sought-after solvency solution for most biotechs. The growing spate of alliances has helped dissolve whatever boundaries remained between the pharmaceutical and biotech camps.
Indeed, the top five sponsors of the BIO show were pharmaceutical giants Merck, Johnson & Johnson, Astrazeneca, Pfizer and Wyeth, whose representatives were out in force on the main exhibit floor.
Still, the surprising failure of the biotech drugTysabri which was linked to brain infections in February, coming on the heels of the decisions by Merck and Pfizer to pull their COX-2 drugs from the market, has shaken the faith of some in the industry.
Ron Cohen, CEO of Acorda Therapeutics in Hawthorne, New York, said regulatory changes could create new hurdles for biotechs but are part of a broad trend in which Americans are becoming less tolerant of the risks and costs associated with new drugs.