Pharmacy & Life Science
Each year, Clead Corporation provides an overview of trends and innovations in the life science industry, encompassing its drugs, biologics, devices and diagnostics sectors. Utilizing a number of in-depth, premium research reports available in the industry, Clead Corporation’s Life Science Trends summarizes and presents a variety of the most up-to-date industry news under several macro headers: Research and Innovation, Fundamental Trends, Investing and Deal Making, Regulatory & Government, and Health Care. The result is a meaningful, “quick-read” newsletter into which our clients, partners and constituents can dig deeper based on their individual interests.
Outlook for Biopharma Industry Optimistic
Although 2010 was a better year for the biopharmaceutical industry than 2009, over the past two years the industry has lost nearly 100 public companies, and tens of thousands of employees. But reason for optimism exists:
√ There was a year-over-year increase in IPOs, as well as a steady stream of venture capital funding.
√ Biopharma supported passage of the health care reform law, which includes a provision for the creation of a regulatory pathway for biosimilars and the Therapeutic Discovery Project Program.
√ The FDA concluded its hearings on AquaBounty Technologies’ biotech salmon meant for human consumption, which if approved would be the first food product from a genetically engineered animal. An FDA analysis of the product found that it was as safe for humans and the environment as its natural counterpart.
√ Industrial and environmental biotech companies are closely watching the legislative debate surrounding investment for alternative fuels. Aside from ethanol subsidies, these firms are hoping for an extension of the infrastructure credit for alternative fuels and want Congress to broaden the scope of the producer’s credit for cellulosic-ethanol to include algae and other emerging feedstocks.
Opinions on life science investing in 2011 are split closely in the medical device and biotechnology sectors. 330 VCs are almost equally divided as to whether investment in biotechnology and medical devices will increase, decrease, or stay the same.
Reflecting increased optimism, 75% percent of all respondents expect venture investment dollar levels to remain the same or increase from 2010 versus 63% in 2009. Of note, 44% of VC’s say the number of investments they will make into new (vs. follow-on) companies will increase.
Optimism is also more prevalent across stage of development with 51% of the VCs predicting increases in later-stage investment, 49% in expansion and seed investment, and 46% in early-stage investment.
More exits are on the horizon with two-thirds of VCs anticipating more venture-backed companies going public while 81% of VCs expect more acquisitions in 2011. More than half expect IPO and acquisition quality to improve or remain steady in the coming year.
Incremental improvements are no longer enough; the industry will need to make a seismic shift to facilitate further progress in the treatment of disease. It will have to learn much more about how the human body functions at the molecular level and the pathophysiological changes disease causes. This is a huge undertaking – and one that pharma cannot complete alone. It will require the support of academia, governments, technology vendors, health care providers and the regulators.