Live from BIO 2011: Competition gets fierce for innovative science

At the height of recession, biotechs were hurting for cash. Big Pharma and its deep pockets were there to cherry-pick the best science at an affordable price from small companies that had little choice but to make deals. But the balance of power has shifted in the past year. Pharma is now face-to-face with the patent cliff, and hardly a week goes by without mention of the industry's unproductive, yet very costly, R&D spending. The industry is scrambling for innovative pipeline programs--and biotechs are in the position to gain from Big Pharma's pipeline troubles. 

"Clearly one of the responses to the tremendous innovation gaps is that big pharma has become more strategic," notes Jason Rhodes, EVP and chief business officer of Cambridge, MA epigenetics company Epizyme. He adds that Big Pharma has become much more flexible with deal terms. "If you have good sciences, it's never been better from a historical point of view." Adimab CEO Tillman Gerngross concurs: "The environment isn't as bad as you make it out to be if you have something valuable, and a real focus on quality. Pharma still has a huge appetite."

Jit Patel, head of AstraZeneca's neuroscience preclinical business development, agreed that Big Pharma is in desperate need of new technology, which has pushed companies to look beyond biotech to the universities for help. "Pharma is increasingly looking at academia to see how they can cut out the middleman of biotech," he noted, drawing laughs from the audience. "We can't just wait for biotech to come up with ideas," he continued. "We need to go directly to academics and attempt innovation ourselves."

Should biotech be worried about the academic partnership trend? As always, it comes back to innovation. "If you're not bringing innovative products, you should feel threatened," explained Steve Ertel, VP of corporate development at Acceleron. "If you've got good stuff you don't need to feel threatened by big pharma's interest in academia."