San Diego’s Biotech Leaders of Tomorrow: ‘We Are the Wildcatters’
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efficiently in IT startups, which could prove to be an advantage when venture capital funding for life sciences in general, and therapeutics in particular, is expected to continue to tighten nationwide.
In 2012, when venture capital funding for life sciences fell nationwide, venture investments surged in San Diego by nearly 19 percent, to more than $709.2 million, according to the MoneyTree Survey from PricewaterhouseCoopers, the National Venture Capital Association, and Thomson Reuters. VC investments in San Diego’s life sciences sector also have remained fairly constant over the past decade—ranging from a low of $544.2 million (in 79 deals) in 2010 to a high of nearly $1.1 billion (in 80 deals) in 2007, according to the MoneyTree data.
Nevertheless, it’s a different environment for life sciences startups these days.
“The difference between 2007 and 2013 is dramatic,” said Nelson of Epic Sciences. It used to be that FDA approval was the final hurdle for new therapeutic companies. Then drugs could be sold, and up-sold, to the broadest possible market. Now Europe is adopting a pay-for-success approach, and the U.S is expected to follow suit as healthcare moves to targeted therapeutics, with expectations of guaranteed results.
To justify the cost of therapies that can easily exceed $100,000 per treatment, pharmaceutical companies will need to demonstrate the effectiveness of their drugs on a case-by-case basis, or risk not being reimbursed, Nelson added. As a result, advanced diagnostics is becoming an increasingly important part of clinical trials and will accompany new drugs right through to precision treatments.
While the geographic contiguity of San Diego’s life sciences cluster is an advantage, Boston and New York hold an advantage in their proximity to Europe, where many of the major pharma companies are based. On the other hand, as Biocom CEO Joe Panetta later pointed out, San Diego is a portal to the expanding pharmaceutical business throughout the Pacific Rim.
“As healthcare goes forward, big data and electronics is the answer, and I think San Diego is well positioned,” said Cypher Genomics CEO Ashley Van Zeeland. “There is a tremendous opportunity there. We just need to capitalize on that.”
In attendance at the dinner—which was sponsored by Biocom, the Kilpatrick Townsend law firm, and Alexandria Real Estate Equities—were Nimesh Shah of Domain Ventures, Martin Sabarsky of Cellana, Scott Forrest of The Scripps Research Institute, Hamza Suria of Anaptys Bio, Peter Chu of Eclipse Therapeutics, Todd Dickinson of BioNano Genomics, Michael Kamdar of Genoa Pharmaceuticals, David Nelson of Epic Sciences, Matt Dixon of Applied Proteomics, David Urso of Tioga Pharmaceuticals, Ted Ebel of SkinMedica, Jennifer Cayer of Rempex Therapeutics, Ashley Van Zeeland of Cypher Genomics, Keith Murphy of Organova, Adam Simpson of Meritage Pharma, Carmine Stengone of Avelas Bioscience, Michelle M. Hanna of RiboMed Biotechnologies, Jason Moorhead of Alexandria Real Estate Equities, Xconomy San Diego Editor Bruce V. Bigelow and contributor Juliet Preston, Joe Panetta and Jennifer Landress of Biocom, and Kenneth Jenkins, Stephen Reiter, and Kandace Watson of Kilpatrick Townsend.