Please excuse this bout of drive-by journalism, but it’s been a very busy couple of weeks for events and news in Xconomy-land. One very impressive local event was the Boston Biotech Business Development Conference on Tuesday (part of the greater Boston Biotech Conference series). The Mandarin Oriental Hotel in Back Bay was full of biotech’s heavy hitters every which way I turned.
I was able to catch a few sessions that focused on the trials and tribulations of large biotech companies, life science venture capitalists, and private startups.
One part I missed, regrettably, was an afternoon chat with veteran investor Peter Brooke of Advent International and Keith Lockhart, the conductor of the Boston Pops, moderated by biotech entrepreneur and venture capitalist Christoph Westphal (see photo above, courtesy of Lacy Roosevelt from Weber Shandwick—you can click on it to see a larger version). Anyone who answers the question “Is the venture capital model broken?” with “There are so many stupid questions,” as Brooke did at another event last week, is OK in my book.
Here are some tidbits from what I saw, heard, and gathered after the fact:
—John Maraganore from Alnylam Pharmaceuticals (NASDAQ: ALNY) quipped that he had a hard time finding his “large biotech” panel (he was moderating) “because it was hard to find a large biotech.”
—Biotechies have a love-hate relationship with Big Pharma—and a hate-hate relationship with the FDA. Matt Emmens from Vertex (NASDAQ: VRTX) noted that he’s hired 600 people in two and a half years, and many have come from pharma. “It’s a good talent pool,” he said. In terms of pharma competing with biotech companies, Richard Pops of Alkermes (NASDAQ: ALKS) said Big Pharma can’t move as quickly to work directly with academic researchers, the way biotechs can. The panel unanimously groused about the challenges of gaining FDA approval for drugs, but they also had some “Stockholm syndrome” sympathy for regulators trying to operate within FDA’s “Byzantine structure.”
—Drug developers can face the dilemma of “turning the corner too early” with new treatments, said Steve Holtzman of Biogen Idec (NASDAQ: BIIB). While these treatments produce short-term praise, patient benefits, and revenue, investors continue to evaluate public-company success on longer-term earnings. So, these companies might encounter difficulty in sustaining profitability.
—More on the evolving relationship between pharma and biotech: Pharma is looking for more external business development opportunities, not wanting to go hostile. Biotech continues to be the first wave of innovation, but it’s struggling to stay small as it becomes big, Emmens said. That is, smaller companies on the verge of going commercial have to either grow into Big Pharma’s shoes, or try to maintain their success through their current collaborative culture and environment.
—Biotech VCs think there’s a new tech bubble, but they don’t agree on its impact. Vaughn Kailian from MPM Capital argued that biotech got spillover from the last bubble and “it was dumb money.” But that was built on lots of companies, versus today’s bubble that’s built on just a few (Facebook, Groupon, Zynga), so he worries about “the dam breaking” and sweeping everything away. Atlas Venture’s J.F. Formela countered that this time, the tech companies have “massive revenues,” so the “bubble has a different shape.” The panel seemed to agree that biotech capital is scarce, and that’s when VCs can get the best returns. (On the other hand, smart observers also realize that no one really knows anything—Venrock’s Bryan Roberts said “companies that succeed end up working on things other than what we invested in.”)
—From the Brooke-Lockhart discussion (with an assist from Weber Shandwick): There is a connection between biotech and the arts, in that opportunity comes out of diversity. It is a tough time for biotech, and it’s always a tough time for the arts; however, it is a great time to look at new ways to deliver products.
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