It’s time for us to stop complaining about the sad state of investments in our industry, regulatory pressures, closure of the IPO window, failure rate of firms, paucity of early stage company investments, difficulty of getting grants, pricing limits, etc. and get to work solving the problems or rather joining others already out there working on solutions. We aren’t a nation of quitters and certainly innovative scientists and entrepreneurs won’t stop inventing and creating. I believe we are just too frozen by fear from broken business models that we depended upon but are no longer working than lack of real opportunities for innovation to get over our problems.
We also have to recognize the patient as an important stakeholder. The low level of adherence among patients in filling and regularly taking their prescribed medicines has many causes, but not least among them is the high cost for medicines that don’t deliver sufficient efficacy and safety to warrant their usage. We used to understand that we needed to deliver quality and value relative to pricing in meeting the expectations of the customer. Delivering an additional month or two of a poor quality of life for up to hundreds of thousands of dollars just doesn’t make sense. Who is going to pay for it? We need to get back to aiming higher and figuring out how to pay for taking those discovery and development risks through collaborations.
I suggest we step back and look at the environment and landscape from a new perspective and, as with the kaleidoscopes we had as children, dial the outer ring to reconfigure the issues and facts into a new pattern to see more clearly that the sky isn’t falling. We need to work together through already existing collaborations and those we need yet to create and develop to overcome the barriers that are holding back our life science industry.
Venture capital funding isn’t really suited for early stage research—the business model with which VCs operate just doesn’t mesh with sufficient payout of rewards to their investors, after considering the high risk discovery and long commercialization timeline. In days of fantasy thinking all investments in companies were supposed to be rewarded with selling stock when the company went public long before commercialization of the product. We all know most of those early companies didn’t match success they promised and never should have become public companies. We developed too many companies then and the founders and investors couldn’t let them fail. Sarbanes Oxley brought some reality to that experiment of funding through shareholders prematurely. For years many companies were able to survive, often changing their names but survived at the cost of disillusioning investors in our industry and poisoning the well.
I want to call to your attention a phenomenally well thought-out, researched, analyzed and written article appearing in the September 5, 2011 issue of BioCentury which developed this topic far better than I can. Although I haven’t yet tuned into the BioCentury TV two-part series “Scientific Risk vs. Regulatory Risk: Part II Debating the Solutions” which is just one part of the “pattern” we need to see more clearly, I wanted to be sure you were aware of this backgrounder for viewing that program and stimulating, hopefully, ideas on your part.
I expect we can all support the effort already underway to change people’s minds and help lobby for the changes that need to be made in our business models and stakeholder systems to overcome the obstacles we have often created by lack of good analysis or thoughtful consideration. Instead of continuing to focus on trying to fix broken solutions or repeating the futility of the past, we need to support the way forward and join those who are already on the path.
There is one area the article overlooked and that’s probably because there isn’t a collaboration of size yet operating in that arena. That collaboration that needs to occur is between stakeholders in the current and future players in personalized medicine. Pharma is just going to have to share the winnings with diagnostic companies and biomarker companies, for example, instead of relegating their partner’s revenues to a minor position relative to theirs. I expected Johnson and Johnson was best positioned to take the gorilla share of that future business back in 2004 because they included all the stakeholder technology companies under their corporate umbrella. I learned that competition for scarce resources even within the same corporation prevented their success. Roche seemed to have realized how to do this. They just needed to take control of Genentech’s pipeline with biomarkers for each drug to form a personalized medicine delivery system on their own. The only barrier they face is destroying the “golden goose” that can continue producing new innovative drugs.
Here’s wishing you a great week with programs to provide needed knowledge, spark your imagination and fuel networks for collaboration. I give you highlights for this coming week’s events below but you can download the entire pdf list of events through November with details by right clicking on the title Audrey’s Picks.
- BioCentury TV Today, See the Webcast Sunday, October 2, 2011 www.biocenturytv.com, Continuously available starting at 9:00 a.m. EDT; Topic: “Scientific Risk vs. Regulatory Risk: Part II Debating the Solutions” The second of a two-part series;” Speakers: Dr. Janet Woodcock, Director of FDA’s Center for Drug Evaluation and Research and Jonathan Leff, Managing Director of Healthcare at Warburg Pincus
- Bio2Device Group, Tuesday Morning, Oct. 4, 2011; Topic: “FTC Loses Lundbeck Appeal: Potential Impact on Life Science Industry Acquisition and Mergers;” Speaker: Francis M. Fryscak, Partner (Antitrust), Cooley LLP
- VC Task Force, Wednesday Evening, Oct. 5, 2011; Topic: “Early Stage Investor Pitch;” Moderator: Steve Bengston, PricewaterhouseCoopers
Steve Wurzburg, Pillsbury
John Steuart, Claremont Creek Ventures
Vish Mishra, Clearstone Venture Partners
Randy Haykin, Outlook Ventures
Moderator: John Lonergan, Mach Ventures
- Medtech Frontiers, Thursday Evening, October 6, 2011; Title: “Augmenting the Surgeon’s Senses;” Speaker: Dr. Catherine Mohr, Director of Medical Research at Intuitive Surgical
- HBA San Francisco Women in Science Event, Thursday Evening, Oct. 6, 2011; Topic: “Changing the Rules Of The Game MidCourse: Payers & The FDA;” Panelists: Kristin Olson, director of government affairs, public policy and reimbursement at Genentech; Alice Varga, senior consultant at BCG; Marianne Laouri, PhD, senior consultant at Deloitte; Moderator: Arlene Kirsch, vice president of payer markets segment and area/segment managed markets at GSK
- BayBio Shire Partnering Event, Thursday, Oct. 6, 2011; Event: Shire Partnering Day Breakfast (see Shire staff on BayBio website.)
- NCC ACRP, Thursday Evening, Oct. 6, 2011; Topic: “Everything You Wanted to Know About IRBs 2011- Answering Your Questions!” Speaker: Erica Heath, Director of Regulatory Affairs at E&I, Ethical and Independent Review Services, LLC.
- CACO Workshop, Friday, Oct. 7, 2011; Workshop Topic: “Drug Discovery and Development Processes for Scientists: Overview, Practices, and Case Studies;” Speakers: Michael W. Dong, Lesley Murray, Bruce Roth, Premal Patel (Genentech)
- Biotech Bay Career Fair, Tuesday Afternoon, October 11, 2011