“Biotech is Broken!” “Pharmaceuticals Out of Balance!” “Venture Capital abandoning Biotech Sector!”

Lately articles on the state of biotech scream out like spinning headlines on the MovieTone News Reels from seventy years ago: “Millions out of work!” or “War in the Pacific!” Since I’m penning my article on Pearl Harbor Day, the dramatic headlines pop and sizzle. Extra, extra, read all about it! The newsboy cry of bad news that always sells: “The Sky is Falling!”

All problems. Few solutions.

Closer examination of the body of reports regarding the state of VC investing in biotech, and the state of biotech companies themselves, does reveal a sector in turmoil. Reduced number and amount of investments and increased numbers of imploding companies. But no more turmoil than I read about in other parts of the bigger economic picture.

Therein lies the rub. I was “born” in this turmoil, getting started in the industry nine months ago. The “Miami Vice” days of VC and the Biotechnology Boom of the 90s are only legend to me.

It’s not as dramatic as the Merrill Lynch Bull, who really is lying hoofs up on Wall Street, but the VC community that I’ve recently joined will certainly get smaller. VC firms and their companies will be lost, and pain will be felt on a personal level as friends fall on hard times. But hard times are relative. While my view is no doubt naïve and I have no wish to be flip about the loss of jobs, I am concerned about the power of the Confirmation Bias. If enough believe that biotech is broken, then perhaps it will be. The idea may intercalate into the fabric of our thinking and even our deals.

Wading knee-deep through the numbers concerning the retrospective analytics of return on invested VC capital in relation to biotechnology innovation makes one thing clear: this is certainly not the end of innovation as we know it. Graphs of annual trends always portray innovation as an ever steady line of growth. The investing in and around innovation – now that oscillates like a sine wave. This isn’t the first time capital around innovation will dip, nor is it the last. But it does underline that now is the time to redouble our efforts to find the next great biotechnology ideas. We will need those great ideas to survive as only the best ideas will continue to be funded. Access to that “proprietary” deal flow of excellent ideas will be the differentiator on who survives the contraction.

Indeed, it is a bear market for capital, but not for ideas. Given there are plenty of good ideas, what is the best way to invest in them now? Beyond the obviousness … Next Page »

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If you had told me last year that today I would be running the offices of Accelerator Corporation—at least for one morning while everyone is out of town—I would have probably sniffed in disdain, tossed my hair, and shuffled back to my post-doc lab bench, a free donut in one hand (magic vendor food) and a stack of cell culture dishes in the other. What you would not have seen is my furious Googling efforts to figure out what the heck your futuristic apparition was talking about. Accelerator wha? Venture capital who? Ah, Biotech. I don’t know about that. Like when Nancy Reagan admonished me to stay off drugs in junior high, my scientific training in academia had left me with the same feelings about Biotech. I felt an illicit curiosity about this dangerous thing stamped as “Business.”

Heresy of the highest order, I inherited the prejudice that biotech and Big Pharma were outposts for sell-outs or worse yet, the incompetents in science. Want your Ph.D. thesis committee to fail you? Mention your interest in business. In late night conversations, hushed tones over cold pizza, (next to the ultra centrifuge in the basement autoclave room), I speculated about what biotech might be like. “They make money? They drive cars younger than they are? How illicit! How exciting!” I had the naïve view that biotech and the business of science were havens for everyone who didn’t want to be an academic. I have discovered I was dead wrong. The scientists of biotech are adrenaline junkies who are just as brilliant and zany as any academician.

Since I’m writing this, one can assume that I did indeed finish my post-doctoral training and switched into business. During the worst financial crisis in 80 years. To the riskiest game on the block (venture capital). Like my desire to study stem cells during the Bush Administration, we’ll just file this one under “it seemed like a good idea at the time.”

In February of this year, I started my new vocation as the intern at Seattle-based Accelerator, a venture-backed incubator for biotech startups. For the record, Accelerator has no internship program. It reviews hundreds of business plans every year, and has a track record of forming three of the most promising companies in Seattle biotech of the past five years—VLST, Allozyne, and Theraclone Sciences—who have gone on to raise more than $100 million combined.

There is clue one: I am as lucky as Charlie Bucket and the Golden Ticket. In my six months at Accelerator, I have seen more scientists like me interested in transitioning to business than I ever thought possible. And I have learned that it is a very difficult transition to make, both in practice and in intellect.

Fast forward back to today. This morning I have answered the phones and doors, taken all shipments for three companies, dropped a transferred call twice on a very forgiving CEO, attempted to find the keys to a rental car in Pennsylvania, built a spreadsheet with all therapeutic antibodies originated in phage display, made three appointments to network for an upcoming trip to Tokyo, scouted technology on two university websites, edited an investment presentation, considered the effect of “Lehman Shock” on global investment liquidity, and prepared to meet a man … Next Page »

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