EVENTS ORGANIZED BY OUR TEAM
1- Don Seiffert
- First topic about M&A:
What to expect for the coming year? Is there a R&D angle to it?
Last year saw two of the four potential deals (Shire-Abbvie cancelled) triggered by tax inversion motives. Not many more of those to be expected this year. On the contrary Shire is currently using its 1.6 billion war (breakup fees) chest to acquire smaller companies.
Boston Scientific could be on the hunt now that they are done paying the J&J fees. They might look into other medical device companies maybe not in the stent business.
Are we in a bubble? Are those big numbers counterproductive?
While last year at the same period, the general impression was that we were in a bubble, this year nothing seems clear. Last year Denic was acquired for 4 bin, that is 250X premium.
The question we raise today is can we maintain this kind of growth? Are the pipelines strong enough? Some companies seem to be on a strike, with game changer drugs like Biogen's Alzheimer drug fn. If there is a bubble it is here to stay.
- Second topic: How does the Life Sience Real Estate evolves?
With the price of SQFTage in Kendall around 70,000/SQFT, a lot is moving to Watertown, Lexington, Natick (Boston Scientific) or Marlborough (GE Healthcare). Baxter with its tiger project moved to Cambridge. Some creative solutions can be found for young companies, where they could rent a lab facility on Kendall to start their activity.
- Third topic: What is to be expected from the new governor in terms of Mass State Policies?
Deval Patrick, launched MA 10years, 1 Bln Life Science initiative. As of today there is no longer arguing about MA being the world hub. The new governor is not committed to Mass Life Science Center, although he will support the tax break.
- Fourth topic: How do CA and MA compare?
Big names of the Life science industry recently moved their headquarters to MA, namely Amgen, GE Healthcare, Shire. CA had about 21 IPOs last year with two regions: San Diego and San Francisco. Meanwhile Boston area had 17 IPO. The facts that MA has only one hub and a bigger geographic concentration makes a stronger case for MA.
- Fifth topic: What about the pharma/biotech drugs price setting issue?
The industry needs to listen to the payers. Great hopes are put on the gene therapy, this is a preventive cost, a lot of innovations are to be expected, but the price needs to be right. Nevertheless, those discussions are not going to cause a slowdown.
2. Value for Money (panel moderated by Jim Shanahan)
Aspect for sustainability: We are currently going from very large diseases to orphan diseases, with very high price tags? is that sustainable? The collegial answers is NO.
Launchpad: The shortage of Capital (no NIH funding) triggers the biggest involvement of business angles than before. The angels do not have the same kind of capacity as bigger investors. They would put 2-3 millions at a time and expecting to have a fast return.
Sanofi Venture: The strategic investors have a different perspective. They look are relatively early stage company, it is more about building relationship than the financial aspect. VC had tough year, with investors pulling money out of their funds for poor performance, they are therefore moving from early stage companies to later stage ones.
Life science nation: To the question: are orphan drugs hot or not? From the 300 mandates related to orphan drugs/diseases 100 are financed through VC and 200 through other categories of investors (Angels, Corporate VC, endowment, foundations, family office, pension fund...). There is democratization fo the funding process, the actors need to keep in mind the benefit for the patient.
Entrepreneurs are going to business angels. Instead of having 10-30 bin at a time they get 0.5-1 mlm. The math does not work for orphan diseases with trials limited in number of patients.
So how do we reconcile? Focusing on the payer is key: No reimbursement means no value for the investor! The alignment with objective of the investors. There is misalignment if targeting drugs with a punitive price tag, there is no flipping of the investment, no immediate return. Some counter examples are the life cycle of drugs, like Rogaine or Viagra, they are not curing! (all acquired or developed by BAXTER)
The funding is no longer going to the therapeutics unless it is through corporate partnerships. Diagnostic devices (class III device, long phase III trials) and healthcare IT have the favor of the investors for now. The exit seems reachable on those projects.
Crowd funding is a big topic but according to the panelist would not be able to provide the intellectual capital needed for this project to emerge. It is more about the time and the knowledge that the investors dedicate to the projects then about the cash. On that note, Entrepreneurs need to be aware about the time and cost of fundraising: 9-18 months and cost 70-200k for a campaign.
Strategic investors not only can provide intellectual capital but infrastructure as well.
3. Last Panel: Innovation and trends
Clearer identification of the value is needed.
Innovation should be earlier in the process.
Innovation is :
-to focus on the patient
-educate and challenge ourselves in a way that is sustainable and affordable .
The Affordable Care Act puts more power in the hand of the insurer but we need to put more power in the hand of the patients. The regulators focus on the safety while the payer on availability and affordability.
Europe and FDA work in very different way. The process is faster in Europe. Interconnected data/devices allow for a more complete view, monitoring of the patients, furthermore the patient stays at home, which is less costly.
How data is impacting (connected objects): the relationship between the patient and healthcare provider change. Attention: data is not information!
Precision medicine=treat patient only that will be responsive. e.g Alzheimer's patient unresponsive to treatment loose 6-9 weeks, patient safety is lost!