They'll survive, and sometimes thrive, because pharma companies are still aggressively going after deals, particularly as the biggest operators continue to view biotech as a source for new programs to replenish the pipeline. And standouts can earn significant acquisition deals, as Forbion-backed BioVex proved last year.
For some, the crowds at J.P. Morgan 2012 signaled a good reason to be upbeat about the year ahead. Durect CEO James E. Brown has been coming annually to the J.P. Morgan conference since 1994. Brown said the climate this year has improved, finally, since the 2008 crash.
"Two years ago people were just walking around looking at their shoes," Brown recalled. He planned to use the session to meet with business development partners, a week after the company announced that its pain drug Posidur generated mixed Phase III data. And in a sign of the company's own optimism, Durect plans to evaluate the company's overall clinical data and by midyear explore pursuing an NDA.
When asked to gauge the life sciences industry climate for the coming year, NPS Pharmaceuticals CEO Francois Nader used two words: cautious optimism.
"Cautious optimism is probably the best way to define it," he told Fierce over lunch at Lori's diner on Mason Street, in between sessions at J.P. Morgan.
The caution comes from this: an uncertain overall economy remains, it is an election year in the U.S., and Europe hasn't yet resolved its own debt crisis. And Nader notes that "we have seen a correlation between the macro-economy and [the life sciences] industry."
With that said, Nader said, things have improved. "In the last few years ... many companies could not make it to J.P. Morgan. The industry is healthier today than two years ago," he said. "There is a lot of cash sitting on the sidelines waiting to invest in promising technology."
Dave Rosa, CEO of device company Sunshine Heart, sees the coming year as a likely mixed bag for the life sciences industry, even three years after the crash.
"If you were a medical device company, what happened during the crash and has not changed is, that VCs used to invest in early-stage companies. And that's no longer the case," he said. "Now, if you are a VC, you want as little risk as possible."
Rosa's company is about to start a pivotal clinical trial for its C-Pulse system, its lead product, a balloon counter-pulsation device designed to help reduce the work of the left ventricle in patients with mid- to Stage III heart failure. And submission for approval, in Europe, at least is likely by midyear. From that perspective, Rosa said he sees an improved climate.
"In 2008, you couldn't raise money at this stage under any circumstances," he told Fierce during the J.P. Morgan event in San Francisco. "But it is easier to raise money now." The catch, he said, is the terms are at an under-valuation.
Undaunted, Rosa's company, which is public in Australia, plans a public listing on Nasdaq by mid-February.
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