In your predictions on what lies ahead for the biotech industry in 2011, you state that in the coming year investors will reward risk mitigated companies rather than earlier stage development companies. How did you come to make this prediction?

 

There are five main risks that developing biotechnology companies face -- technology risk, regulatory risk, reimbursement risk, execution risk, and financial risk. Investors over the past 25-30 years have, by and large, owned all these risks and basically invested in the hopes and dreams of those molecules and companies that we believed were going to make a difference. But today the investment community is largely unwilling to own all those risks. The community is looking at investing in companies that have in some way reduced some of these risks. They are asking: Has the company reduced regulatory risk? Has it reduced reimbursement risk? The community today is very interested in transparency and liquidity, which causes investors to move to higher and later stage value kinds of companies rather than the early stage companies that they have invested in historically. So if you look at the venture capital industry as a whole, you see that it has moved upstream to invest in public companies and later stage development, causing a shortage in investment at the early stage.

 

Considering this shift in the venture capital community, what would you recommend for early stage companies that are looking for investors?

 

If you're going to start a company today, you have to think differently about how you source capital than you did 25 or 30 years ago. When you look at where capital is available for early stage companies in the United States and Europe today, you see that funding is still out there. Instead of coming from the venture capital industry, it is available from disease advocacy groups, celebrity charity organizations, development organizations, states and universities, angel investors, and others. Entrepreneurs just have to figure out how to go out and find it.    

 

In your predictions, you also focus on the growing important of emerging markets, particularly in Brazil, Chile, China, India, Malaysia, & Russia. Do you see this having an impact on research and development for neglected tropical diseases? For example, is it likely that companies working in Brazil will begin thinking about diseases that primarily affect Brazil and Latin America, such as Chagas disease?

 

In today's world, the marketplace for your products, when and if you get there, is different. It used to be that the United States, Japan, and Europe each represented one-third of the world's marketplace. Going forward, 55% of the world's marketplace is going to come from places where there were no sales before, i.e., in emerging markets. And so now the question is: Who's going to dominate oncology drugs in China?

 

The other thing, on a very macro level, is that we're moving from a largely cost-based health care dysfunctional sickness system into a value-based, functional wellness-based system around the world. And so, if you could prevent Chagas, you might be able to have more substantive economic impact than just to treat people with Chagas. We're beginning to see societies move away from the one-size-fits-all drug world to a world where prediction, prevention, and personalization change the nature of the opportunity and the source of the innovation. And global health in that context is going to change dramatically.   

 

Thanks for your time today. Will you give us an idea of when your next book, Biotech 2011 - Life Sciences: Looking Back to See Ahead, will be published?

 

The book will be available both digitally and in print March 1, 2011.

 

Join BVGH at 3 PM on March 8 for a sneak preview of our 2011 Global Health Primer. The 2011 update not only expands the neglected disease profiles found in previous versions, it also includes an entirely new viewing angle of global health product development. The Primer now examines products in development based on their target or technology, across multiple diseases. We hope the new analyses and target/technology profiles will help biotech companies identify the neglected diseases that are most relevant to the technologies and expertise of their organizations. To RSVP, contact Katy Lenard at klenard@burnesscommunications.com or 301-280-5719. 

The Bill & Melinda Gates Foundation is accepting letters of inquiry for the new grant program Biomarkers for the Diagnosis of Tuberculosis. This grant program is part of the Grand Challenges in Global Health initiative. With up to $12 million of funding, the program seeks to validate biomarkers for use in developing a low cost, simple to use test that can quickly and accurately diagnose tuberculosis in low-resource settings. The term biomarker is intended to include all types of markers that have potential utility for tuberculosis diagnosis and can include markers associated with either host or pathogen biology. Letters of inquiry are being accepted online until March 31, 2011 10:00 am PT. Details and application instructions are available at http://www.grandchallenges.org/biomarkers/eb.

Third Annual G-FINDER SURVEY Now Available

 

The G-FINDER survey, now in its third year, is the most comprehensive report to date on public and private funding into R&D for neglected diseases like malaria, TB, HIV, pneumonia, sleeping sickness and helminth infections. It covers 31 diseases and 134 product areas for these diseases, including drugs, vaccines, diagnostics, microbicides and vector control products. In 2009, 218 organizations completed the survey, covering all major public, private and philanthropic funders. This year, the report has expanded to include, for the first time, data from private companies in Brazil and India as well as public funders in Ghana, Colombia, and Thailand. The G-FINDER survey is conducted by the independent research group Policy Cures and funded by the Bill & Melinda Gates Foundation. Read the full G-FINDER report here.