Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Genomic Health CEO Kim Popovits (left) made the trip from the Bay Area to join the speaker lineup, and connect with friends and colleagues in the Seattle biotech industry. Genomic Health's VP of communications, Emily Faucette (center) joined her.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Bob Nelsen of Arch Venture Partners (right) found time to connect with former Life Sciences Discovery Fund leader Lee Huntsman (second from right) and Scott Ramsey (third from right) of the Fred Hutchinson Cancer Research Center.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Peter Thompson of Orbimed Advisors shared a laugh with Cliff Stocks of Theraclone Sciences.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

We had a full house for this event at Northeastern University Seattle.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Risa Stack (center) of GE's healthmagination program, found a spot near the kitchen to connect with InDi CEO Al Luderer (right).

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Hans Kemp of Jones Lang LaSalle (center) and John Bencich of Integrated Diagnostics (right) were among the folks who understand that it's good to show up early at Xconomy events. You never know who you'll run into.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

The crowd settled in at the start for the opening presentation by Scott Ramsey, the director of the Hutchinson Institute for Cancer Outcomes Research at the Fred Hutchinson Cancer Research Center.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

John Cox of Alexandria Real Estate Equities made it out for this event. I'm not 100 percent sure, but I think he's talking to Matrix Genetics founder Margaret McCormick here. I didn't have a chance to say hi to Margaret at this event--another time.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

There were some somber looks in the crowd during Scott Ramsey's presentation. One of his slides said that if healthcare costs continue to grow unabated over the next roughly 40 years, then the wealthiest Americans would have to pay a 92 percent marginal tax rate to cover the costs. Something's gotta give, because that's not going to happen, Ramsey said.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Chris Kalafatis of JP Morgan (center) was a good sport about me and my camera phone. He's pictured here with Hans Kemp of Jones Lang LaSalle.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Normally, I feel bad when I see people looking at their smartphones at an event. Tells me I'm not engaging the audience. But in this case, I think Steve Graham of Fenwick & West (center) and Sissy Bouchard of the Institute for Systems Biology (in yellow coat) were sharing photos. Two minutes earlier, I had shown them some pictures of my daughter, which sparked some funny stories about parenthood.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Chad Robins of Adaptive Biotechnologies (center) had a chance to tell his company's story of using next-generation genome sequencing as a powerful new cancer diagnostic. On the left is his brother, Harlan Robins, a co-founder of Adaptive and a scientist at the Fred Hutchinson Cancer Research Center.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

The biotech consultant Stewart Lyman (in the blue shirt)---always an astute observer of industry trends---listened carefully from beginning to end. He told me he sees more biotech companies gravitating to the treatment of rare diseases, partly because there's less pressure from insurers to lower prices for those drugs. Stewart is pictured here talking with Bob Overell, CEO of Seattle-based PhaseRx.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Chris Rivera, the president of the Washington Biotechnology & Biomedical Association (center), came early and stayed late. I know this is an issue that's important to him, as he advises entrepreneurs to think about their reimbursement strategy from the founding days of a company.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Sometimes you walk by the people networking and wonder---is somebody going to break out a magic marker and draw a picture of what they're talking about on a white board?

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Scott Ramsey set the tone with some sobering data on rising healthcare costs and spending on cancer, in particular. Mitch Gold of Alpine Biosciences challenged him at one point, noting that Europe has constrained healthcare spending, and still has a financial crisis. Ramsey shot back that the U.S. spends 18 percent of its gross domestic product on healthcare, while France spends 10 percent and gets better health outcomes. Ramsey wondered what the U.S. economy could do if those 8 percentage points of economic output were freed up for other productive activities.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

I need to work on the whole nonchalant photographer bit. Looks like I caught Dendreon CFO Greg Schiffman (center) by surprise.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

John Bencich, the CFO of InDi (left), pictured with Harlan Robins, the co-founder of Adaptive Biotechnologies.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Time for more networking at the end of a full afternoon. Sonya Erickson of Cooley (left), shared a moment with consultant Rhonda Rhyne and Tayloe Washburn, the CEO and Dean of Northeastern University Seattle.

Biotech in the Belt-Tightening Era

Biotech in the Belt-Tightening Era

Like all Xconomy events, we had a good group of graduate students and postdocs who took advantage of our discount tickets to meet who's who in biotech, and learn more about what's what. I always enjoy meeting new young people who come out to our events.

Healthcare costs can’t keep going up faster than inflation forever. Biotech companies aren’t going to have unlimited pricing power for new drugs and diagnostics forever. Innovators will have to adjust.

But how?

This was the theme of our big Xconomy Seattle event this week, “Biotech in the Belt-Tightening Era.” We had a great crowd from around the West Coast come together for a series of moderated talks with established drug and diagnostic companies, as well as a few promising up-and-comers. All of them are clearly thinking hard about how to demonstrate that their products improve patient outcomes, and that they are worth the money.

I think everyone recognizes there will be cost constraints in healthcare of the future, but each company has a different strategy for navigating that new environment. Clay Siegall of Seattle Genetics said his company will keep attempting to make drugs like brentuximab vedotin (Adcetris) that make a big difference in the lives of patients, and that can fetch high prices with little pushback from insurers. Mitch Gold, the founder of Alpine Biosciences, said he’s focusing on a new low-cost technology from the University of New Mexico that can stimulate the immune system to fight cancer, and which should give him future flexibility to make money at a lower price. Kim Popovits, the CEO of Redwood City, CA-based Genomic Health, says there’s going to be increasing demand for technologies like Oncotype Dx that can squeeze expensive overtreatment out of the healthcare system.

Thanks to all the speakers and attendees who brought diverse perspectives to such a tricky issue. Special thanks go out to Northeastern University Seattle, which did a great job hosting this event, and even provided a fabulous parting gift to attendees (a combination beaker/coffee mug). See you at the next Xconomy Seattle event.