“The Annual BIO Investor Forum” held on October 28 and 29 had a solid agenda tailored for the current bear-market mentality. Roundtable discussions and workshops revolved around timely topics such as prostate cancer pipelines, clinical trial management, and alternative financing structures.
IPO and Financing
The business roundtable on October 28 called Window Shopping covered the IPO window, which has really been nonexistent this year. The panel noted that a blockbuster model for success is needed, such as a buyout trend or some successful IPOs. Investors need reason to believe and a compelling need to get in.
The panel cautioned companies on their IPO hopes saying that if milestones cannot be achieved post-IPO and the stock price is underwater, it would be “pure hell.” The CFO from Targacept, Allan Musso, presented a case study on how the company attained its goals and became one of the biggest success stories of 2009. The stock soared from about $4 to $19, and the firm raised $46 million in an October public offering.
VCs are more focused on building later stage companies in their portfolio and conserving cash and are not worried about an IPO window for their liquidity event. One VC commented on a “barbell strategy for seeking value at an early stage or a late stage since a lot of mid-stage private companies can be too expensive.”
The significant M&A trend will continue and likely be bio/bio deals not big pharma/bio transactions. Big pharma is more focused on the financial aspect of acquisitions, buying revenues and cutting expenses to improve profitability. In bio/bio deals strategic aspects are more important, such as technology and pipeline.
Healthcare reform and a tougher FDA are current factors impeding the financing environment but are more of an issue for incumbents not innovators. One comment was that the FDA situation should get better as the overall staffing situation is being upgraded.
New Influenza Vaccines and Therapies
The therapeutic workshop on October 29 provided a brief review of the 2009 H1N1 flu pandemic challenges, two emerging companies, and a review of the nasal spray seasonal vaccine. A survey of 50 physicians presented by Panel Intelligence found that many M.D.s were unaware of the vaccine manufacturers names, were concerned about the shortage, and thought that only 41% of the population will receive the H1N1 vaccine.
The need for new vaccine technologies was stressed, highlighting the limitation of producing a new vaccine every 12 months with lead times down to six months as the new strain is defined and grown in fertilized eggs. As of October 28, 23 million doses of H1N1 vaccine had been allocated, 19.5 million doses ordered, and 17 million doses shipped. Federal officials expected to have 120 million doses by now.
New technologies were presented that can address some of the vaccine-related issues, such as the FluMist (AstraZeneca) nasal vaccine, DNA vaccines being developed by Inovio, and virus-like particles, or recombinant particle vaccines, being developed by Novavax. New technologies have not quickly translated into vaccine products due to safety, clinical data requirements, and consumer issues.
In the long run, however, these emerging technologies are likely to improve manufacturing and make vaccine production more economical. Emerging technology such as recombinant antigens and adjuvants are already in the new HPV vaccines.