This year's unofficial theme at BIO is how to survive the economic crisis--with a lot of different ideas over just how this will play out in the future.
"I think there are at least 10 sessions on how to sell your company," quipped Stephen Sands, the managing director at Lazard Freres. If you miss one discussion, "just go on to the next session."
You can call this downturn the perfect storm, which appears to be a favorite expression at BIO. Companies are going bankrupt at an unprecedented rate, biologics are facing the loss of unlimited patent protection, the markets are in disarray, healthcare reform is looming and India and China are emerging as two major players in an increasingly global biopharma industry.
But is there a light at the end of this tunnel?
"This is just a cycle. Those of us who have gray hair have been here before," says Vaughn Kailian, managing director of MPM Capital. Cash is king, he adds, "water in the desert."
"I think a lot of people are writing the obituary of the industry," says investment banker Steven Burrill. And that would be wrong. But anyone who thinks that this is another business cycle that the biotech industry will weather and then return to the old status quo should think again. The industry will come out of this crisis stronger and better, he adds, "but substantial change is real."
Says Burrill: "This is not a blip."
Stair-step financing with one venture round automatically following another is history, he says. Reform is happening, IPOs are in limbo, comparative effectiveness will create a new standard for approval, Medicare will be allowed to negotiate drug prices and more hard times await us before the recession will end. And you better believe that capital is king, Burrill told a big group on Tuesday.
Look outside the box--and possibly outside the U.S.--for funding sources, says Burrill. And don't be too surprised if you find it. The U.S. biotech industry is resourceful, on track to raise $30 billion to $40 billion in new funding this year. And that's one of the most hopeful signs on biotech's dark horizons.