January 7, 2010
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Late last year, a PwC report made the rounds with a big headline number — $232 billion — as the size of the personalized medicine market. FierceBiotech called it a “tipping point,” for personalized medicine. George Church called us “the first genomic generation” in Newsweek, and Francis Collins’ new book “offers practical advice on how to utilize these discoveries for you and your family’s current and future health and well-being” (at least according to its publisher).
And this isn’t just idle speculation, it’s being reflected in real investments. Cancer Research UK, the Medical Research Council, University College London, and the Wellcome Trust are developing a £500 million new home for their partnership, called the UK Centre for Medical Research and Innovation (UKCMRI), where “genomic technologies will play a key role in the array of research its partners plan to pursue there.”
However, there are real challenges to realizing the 11% annual growth rate PwC predicts.
- Health care providers need to learn a whole new language and a whole new set of tools and approaches. A new year-long project at Valparaiso University aims to meet the new criteria of the nursing curriculum essentials in genetics that are set by the American Association of Colleges of Nursing (AACN), but this is just the tip of the iceberg. (h/t @mikesgene)
- Even when health care providers are educated, it doesn’t mean that the market will grow. For example, there is high awareness (80-90%) of a new genetic test designed to reveal a breast cancer patient’s sensitivity to tamoxifen. However, according to research from Duke University Medical Center, “[a] greater awareness of the emerging data for this new test corresponded to less likelihood of ordering the test and lower likelihood of changing practice based on test results.” (emphasis added) (h/t @DukeIGSP)
- The Genetic Information Nondiscrimiation Act loopholes are still intimidating. GINA does not expressly cover long-term care and other types of insurance and is focused to some extent on prohibitions on requiring genetic tests (which will be moot when everyone’s full genome is sequenced). Some efforts to remedy or mitigate GINA loopholes are underway, including:
However, many patients (and, anecdotally, everyone in the insurance industry) are vociferously refusing genetic testing and sequencing.
- FierceBiotech notes that the PwC report itself identifies another caveat: “Big Pharma will have to bury its blockbuster business model in favor of a more “collaborative model.”
My bottom line: Those who are counting on seeing the growth predicted by PwC will have to make an unprecedented investment in educational and regulatory changes to sychronize with the unquestionably giant strides in product innovation that are occuring daily.
For more on personalized medicine, check out the Biotech Trends in 2010 page.
May 12, 2009
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There have been a lot of opinions over the last couple of weeks, with little consensus.
On the pessimistic side:
- E&Y’s annual biotechnology report was released a week ago, and the reported taglines ranged from “time of reckoning” to “biotech business model crumbles“.
- The first report from Canada’s Science, Technology and Innovation Research Council said that Canadian businesses are stingy in funding research and development.
On the other hand:
- The BIO SmartBrief story on E&Y’s report noted the E&Y data showing that mergers and acquisitions had a near-record year in 2008, amounting to $28.5 billion in the U.S. alone.
- And, Rx&D’s response to the STIC report notes that pharma R&D investment, MaRS and Montreal’s biotech/pharmaceutical cluster are all highlights of the report.
- Finally, BIO President and CEO James C. Greenwood said that most biotech firms likely will survive the financial crisis despite a shortage in cash assets and the lack of investments brought about by the deep freeze in initial public offerings.
E&Y’s 2008 data is consistent with the PwC-BIOTECanada report and likely reflects extra pessimism because it cuts off before the latest stimulus investments, including over $1 billion in Ontario and Québec. As that money, plus the Ontario Venture Capital Fund, gets deployed, I think Greenwood is likely to be right and things will start to look up.
Although Q1’s venture capital and private equity numbers still look grim, the Monday Deal Review is showing increasing activity the last few weeks and even a few offerings by public companies.
April 20, 2009
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The BIOTECanada-PricewaterhouseCoopers 2009 Canadian Life Sciences Forecast was released today.
The Forecast was produced from data gathered in October and November 2008, so is (unsurprisingly) a bit bleak, but there are a few bright spots to be found:
- Canadian companies are increasingly flexible about exit scenarios. In the 2009 Forecast, 66% of firms looked to mergers (down from 80% in 2007), while 48% looked to co-development partnerships and 46% saw licensing or selling IP as their success strategy.
- Some problems were reduced from levels reported in 2007:
- Only 26% of respondents identified “attracting and retaining key employees” as one of the three most challenging issues, down from 39% in 2007;
- In 2007, 33% of respondents identified “attracting a licensing or strategic partner” as most challenging, which was down to 22% in 2009; and
- 21% instead of 29% of respondents cited “managing the regulatory process.”
- Finally, there was a 66% increase in the number of respondents who believed “protecting intellectual property” would be a top-three challenge, which is excellent news … at least for lawyers.
The predominant issue weighing on the minds of respondents was clearly access to capital:
- Sixty-one percent of respondents ranked “increased Canadian venture capital” as critical to the industry; and
- While the overall percentage of companies expecting to raise between $10 million and $100 million in their next round remained the same as it was in 2007, the percentage expecting between $10 and $25 million tripled while the percentage expecting betwen $25 and $100 million was cut nearly in half.
The really good news about this, though, is that since the survey was taken last Fall, over $1 billion in venture investment funding has been budgeted in Ontario and Québec, and the Ontario Venture Capital Fund has already made several commitments … some of which are bound to end up with biotech VCs, right? Right?? Stay tuned.