BIO's James Greenwood sees industry optimism returning
|Jim Greenwood, BIO President and CEO--image courtesy of BIO|
BIO President and CEO James Greenwood will tell you that 25% of the publicly traded biotechnology companies that existed at the start of the credit crunch in 2007 have subsequently vanished, wiped out of existence by the turbulent investor climate. And as a sluggish economy trudges on, entrepreneurs hoping to launch new life sciences startups still must confront gaping voids in early-stage funding options. But Greenwood sees the tide finally beginning to turn after several tough years.
"The credit crunch has been a significant factor in terms of the global recession, but on top of that we have suffered from the phenomenon of seeing VCs, even when they do have funds available, having hesitancy in investing in early stage companies the way they used to," Greenwood told FierceBiotech in a sober assessment of recent events. But, he insisted: "We're moving from a sense of pessimism to a growing sense of optimism."
This week marks the arrival of the 2012 BIO International Convention, set for June 18-21 in Boston.This will be the first time in a while that the industry can look back over the past year and see some real progress, and also feel optimistic about the months ahead, Greenwood argues. Reflecting this, he expects more than 16,000 biotech industry attendees from around the world to land at the conference. BIO also has what it says is a record 25,000 networking meetings scheduled, and the massive event scheduled 125 different panel discussions with hundreds of speakers. Former treasury secretaries Robert Rubin and Hank Paulsen will even be there for the June 19 keynote presentation to talk about the challenges and opportunities the industry faces within the global economy in the months ahead.
Another change: Attendees will also notice a big boost in the presence of diagnostics companies, Greenwood said, reflecting the ever-growing trend of developing companion diagnostics for targeted drugs to treat a variety of diseases.
"You will see more discussions of those products in the panel discussions," he said. "Less visible will be a lot of conversations that go in the business forum booths between companies that have those technologies and want to license them to [another]."
In a wide-ranging interview with Fierce, Greenwood covered a number of issues life sciences companies care about and insisted he sees genuine progress in many of those areas, including:
Nasdaq and the public markets. "The Biotech index is up 14% this year whereas the rest is pretty flat," he said. "The value of equity is improving. And the indicator has been going up since 2011."
The FDA. While Greenwood blames the hyper-cautious VC investment environment, in part, on concerns over the FDA's "willingness to be realistic about the risk-benefit ratio and approve more products," he sees the last year as representing an improvement. "We've had a pretty good year ... in terms of the FDA picking up the pace," he said. Among the accomplishments: Vertex's ($VRTX) approvals for the vital new hepatitis C treatment Incivek. He said that approval, and others "are really likely to be blockbusters for millions of people around the world."
PDUFA. This year's prescription drug user fee act "accomplishes everything we expected it to," he said, including new regulatory timetables, higher fees, and the inclusion of BIO-supported language that returns to a previously restricted practice allowing informal communications between company and FDA scientists during the approval process. This provision, he said, is crucial for smaller ones in particular to help them gain an understanding on how to prepare INDs and approval applications in the most productive way possible. This helps give the industry vital guidance, he said, that will "increase the likelihood that the FDA will approve their applications." Also accomplished: the lifting of a ban on individuals who had consulting relationships with companies from participating in those companies' FDA advisory panel hearings.
BIO wanted more items included and Greenwood said the group will continue to pursue other changes, such as the creation of an outside panel that would work with FDA to improve its internal operations--a review board modeled on what is practiced at the NIH.
"The FDA should be a standalone agency outside of the Department of Health and Human Services," he said. "But PDUFA is a good agreement (overall) and we are looking forward to it being enacted."
Early-stage funding. The struggle continues, but Greenwood said BIO has a number of ideas to address this in the organization's 5-year plan including a number of proposals that specifically address capital formation. Among them is a plan that would allow investors to put their funds in limited partnerships that would invest in a series of biotech companies, after which losses and gains would go back to the holding company. Those losses could be deducted from the gains, and investors could take their profits out of what is left, in a system modeled after tax credits given to oil and gas companies seeking to develop new wells.
"That would be a very good way to incentivize more investment into smaller biotechnology companies in the life sciences field," Greenwood said.
Biosimilar regulations. With the FDA still hashing out final regulations for biosimilars, BIO is watching the process very closely, Greenwood said. "We want to make sure the regulations reflect the philosophy that Congress adopted when it passed the legislation, that biosimilars need to be subjected to clinical trials and rigorous scientific evidence before [they are] approved as a biosimilar," he said. "It is important that the patient and physician have the right to make sure the patient is not switched from a sweeping innovative product to a generic product, and the names need to be distinct and different so there is no confusion."