Bio Investor Forum 2015 #1 Notes-Policy and Venture Capital

General Issues from Bio Investor Forum

See BIOtechNow for detailed articles on BIF#15

Biotech executives and investors came with a record 900 attendees to this annual event which presents key issues in the industry and offers a networking forum with 175 presenting companies to meet with potential investors and partners. Energy and enthusiasm abounded despite the shock of a 25% correction in the biotech sector over August and September leaving many industry experts to speculate on future trends for financing, pricing and policy issues.The biotech industry in 2015 saw record inflows of money, 30% of all IPOs, 550 companies with a $1T total market cap in a five-year bull market that is still up 247%.  There was widespread concern about drug pricing which first hit with the Gilead Sciences’ Sovaldi HCV therapy in 2014 then exploded with the Hillary Clinton tweet on Sep 21. catalyzed by the Turing Pharmaceuticals outrageous price increase.

No doubt biotech stocks were driven to bubble levels in July with momentum not seen since 1999 setting the market up for a fall when pricing and valuations are being questioned. Now that the exuberance has waned we can get back to reassessment of key market drivers such as innovation, M&A and product growth. And new drug delivery platforms in gene therapy such as CAR-T and gene editing offer the potential of a new class of drugs. Here are some of the complex issues affecting the industry being discussed in various forums.

Policy Outlook

21st Century Cures Bill H.R. 6-passed by the House

This is a major bill affecting the industry that intends to accelerate the discovery, development and distribution of 21st Century cures. Among the Subtitles include NIH funding, supports young emerging scientists, offers grants, supports patient focused drug development, permits data access,qualification of drug development tools, modern trial design etc.

It offers pathways to personalized medicine which means the FDA needs to get involved in biomarkers or surrogate markers to expedite drug development. Pediatric exclusions for rare drugs are incentivized.

The Bill puts a heavier load on the FDA which will need more funding from Congress.

Patent Litigation Reform is another key issue for biopharma and things could get tougher for the industry. H.R.9 The Innovation Act. Hedge funds like Kyle Bass are on the attack. Patent challenges at the PTAB have doubled.

See a related article on “The Patent Troll Smokescreen” by Joe Nocera an OpEd columnist for the NYT.

TPPTrans Pacific Partnership

There were a lot of concerns about about the TPP and how it may affect biotechnology primarily about data exclusivity and patents for biologics. A 12 year period of exclusivity is needed to spur medical innovation and new cures. Shorter patent protection with TPP to five or eight years would be a disadvantage for the industry and may affect drug prices.

Venture CapitalHaves and Have Nots-Biotech VC

An excellent review with data regarding US biopharma venture capital was covered in a two hour session at BIF15. The three key findings were:

  1. Late round financings (B,C,and D) were strong but Series A dropped off.
  2. There is no growth in new company financing with 62 new companies down from a peak of 89 in 2006.
  3. Specific investments picked up in rare diseases and oncology but declined in chronic diseases such as endocrine, cardiovascular and psychiatry.

More to come on BIF#15 including Companies to watch.

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