What Happens When a Herd of VCs Runs Away From Biotech? Highlights From Yesterday’s Tweetchat
[Corrected: 8:41 am ET] Turns out you can say a whole lot about the biotech venture capital crisis in 140 characters or less.
Yesterday, Xconomy hosted a lively back-and-forth on the state of life sciences investing and innovation with guest Daphne Zohar (@daphnezohar), the founder and managing partner of Boston-based PureTech Ventures. I tried to keep this chat limited to 30 minutes (we’re all busy, right?) but that was actually pretty naïve. There were at least 26 Twitterers who jumped into this fast-moving Q&A fray, with people sending a total of 172 Tweets in the form of questions, comments, or re-tweets, which you can find on the searchable hash tag #bioVC.
Everybody got a word in edgewise. At the beginning, I asked Zohar: “With a few VC firms getting out of life sciences, others merging, what effect is this having on innovation?” But before she even had a chance to answer, Jens Eckstein, the head of GlaxoSmithKline’s SR One venture capital arm, jumped in. “It’s unfortunately not only a few getting out of LS, it’s a herd! Very concerned about breakthrough innovation in LS!” wrote Eckstein (@akikoacom). He followed that up with a Tweet that said, “In a recent exercise tried to count bona fide active early-stage investors globally – barely fills both hands.”
A few seconds later, Zohar offered her take: “biotech ecosystem is in disarray. Few innovative companies getting launched. Really exciting academic science tho.” And then she retweeted Eckstein’s message, to her followers, about the shortage of active early-stage investors.
And so it went.
There were questions from entrepreneurs about PureTech’s investing strategy, about how to stir more life sciences innovation in Middle America, and about whether scientific entrepreneurs need more training before they can attract money. There was even a jab about the Red Sox (even in November. Come on guys, time to let it go).
The whole chat wasn’t complete doom and gloom, though. As Zohar put it: “Positives: pharma hungry for innovation. M&A deals for non-approved drugs had Avg value of $480M w/ Avg upfront of $219M.” [Correction: An earlier version of this post said Gautam Kollu made this comment; it was actually Zohar responding to Kollu.] And people are still processing Gilead Sciences’ breathtaking $11 billion takeover of hepatitis C drug developer Pharmasset (NASDAQ: VRUS) on Monday. As many commentators have noted, this is a pretty large chunk of change for a company that has shown impressive clinical results, but doesn’t yet have its own drug on the market.
For a full rundown of the Tweet-by-Tweet, check this compilation on Storify by my Xconomy colleague Lilly O’Flaherty.
Thanks to everyone who joined this great, freewheeling chat online. This Tweetchat (and a previous one with Alnylam Pharmaceuticals CEO John Maraganore) were so popular that I’m convinced there’s enough interest for us to keep doing them on at least a semi-regular basis. If you have any suggestions for people and themes that you think would be good for us to convene, just send me a note at firstname.lastname@example.org. Or if you’re a really hard-core Twitterati, send me a DM @ldtimmerman.