The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Tag Archives: pharma

Pharma / Biotech R&D Budgets – A Proposal For Measuring Performance

During the BioFinance 2011 conference held in Toronto last week, one presenter showed a slide that outlined the number of new chemical entities (NCEs) approved by the FDA over a number of years. Since this slide was used in the context of the increase in global industry R&D budgets, it was meant to show that the huge increase in R&D budgets had not produced an appropriate increase in NCEs approved at the FDA. Is this the correct way in which R&D performance should be measured?

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Rumoured Omeros IPO Might Signal Newly Opened Window

light at the end of the tunnel smallAn article in Xconomy Seattle today reports rumours that Omeros, a company that has been around since 1996 and has raised over $102 million in private money, may revive its 2008 IPO plans.

The company’s lead products — “proprietary low-dose combinations of existing drugs” — are more pharma than biotech, putting it in line with Cumberland’s recent IPO.  However, Omeros also has a pipeline of preclinical CNS and inflammation molecules, so if its IPO succeeds, it may indicate that the public markets are truly (despite some skepticism) opening again to biotechs.

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Cumberland Ends Bio IPO Drought But Prices Under Range. Next Up, Emdeon.

Cumberland Pharmaceuticals (NASDAQ: CPIX) raised $85 million in its IPO today, pricing at $17 per share.  This was less than the $19-21 per share range, but since it’s the first bio IPO since November 2007 we won’t complain.

The company is planning to use the proceeds to buy late-stage or approved therapies for acute care and gastroenterology to go along with their existing approved products — Caldolor, an IV form of ibuprofen, and Acetadote, which treats acetaminophen overdose.

The WSJ Health Blog notes that Cumberland is the first of two planned healthcare IPOs this week.  Stay tuned for Emdeon, an electronic medical-billing systems company that is looking for over $330 million tomorrow.

Existential Question for 2009: Is a Virtual Company Virtually as Good?

A thought-provoking piece over at Capital Rants (and the BlackBerry Partners Fund Blog) from Pierre Donaldson says, basically:

virtual-schmirtual, there’s no substitute for the interpersonal benefits of a physical headquarters where the whole team is regularly under the same roof and interacting face to face.

On the legal side, we have a tendency to view virtual/physical, outsource/in-house issues from a straightforward economic perspective, basically:

is the price of the virtual/outsourced service, plus the cost of managing the service, plus the transaction cost of setting up the service, less than the cost of providing it in-house?

Nominally, the issues Pierre is talking about fall into the service management costs bucket, but his post draws attention to some opportunity costs of virtualization, something generally not given enough attention in the  accounting cost version of these calculations.

Overall,  I agree that lack of physical interaction is an impediment to team spirit — the post’s central “Locker Room Theory”.  

The point I want to quibble with is:

“We can e-mail, IM, SMS, blog, tweet… you name it.  It is exactly as if we are constantly sitting right next to each other, right? … I’m sorry, but I don’t buy that at all…

“It’s about the water cooler conversations and finding out that your sysadmin’s favourite uncle has a golf buddy who is CIO at that large corporation you’ve been trying [to] partner with.” 

Lumping e-mail with Twitter, and leaving out LinkedIn and Facebook from his list is obviously leaving out a lot of nuance.  All three are useful virtual tools with far greater reach (though maybe less (normalized) utility) than sysadmins and uncles and golf buddies.

But, can we really virtualize networking the way we’ve virtualized companies?  When the BlackBerry Partners Fund shackles their portfolio company teams to an office and sends them on corporate trust-building retreats, are they building the next … BlackBerry … or are they taking valuable time away from meetups and status updates and the next great tweet

The current economic climate will likely result in a large-scale experiment as companies in a variety of industries either hunker down and go back to the water cooler or attempt to tweet their way out of their individual crises.  Hindsight, no doubt, will be 20/20.

Pharma and biotech companies are constantly faced with these virtual/physical outsource/in-source questions; and I expect we’ll continue to see a lot of comepeting approaches.  Fully virtual companies are possible and successful, with R&D, formulation, CMC, regulatory and clinical trial capabilities fully available on a contract basis from a bevy of worldwide competitors.

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The Patent Reform Act of 2009: Absent Inequitable Conduct Provisions Help Biotech

The Patent Reform Act of 2009 was introduced by Senator Patrick Leahy (D-VT) Chairman of the Senate Judiciary Committee. The bill includes Senator Orrin Hatch (R-UT) as a co-sponsor. Notably missing from the list of co-sponsors is Senator Arlen Specter (R-PA), Ranking Republican on the Judiciary Committee.

Provisions relating to inequitable conduct have been removed from the previous version introduced last year. Inequitable conduct is a critical provision for the larger pharmaceutical companies. Provisions relating to apportionment of damages are of secondary importance to large pharma, but critical to biotech. The biotech industry does not favor the current damages language. The fact that inequitable conduct provisions are missing means that large pharma will focus its opposition to the patent reform bill on damages provisions.

The text of the Senate bill is not up on Thomas yet, but you can find the full text as introduced here (pdf).  See also Dennis’ Patently-O post with summary and commentary.

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