The Soul of Biotech

My notes on the 10-minute company pitches. None are portfolio companies of Burrill, the sponsor.

* Blacktoe Medical: finger probe connected to HUD so that doctor can see what’s at the tip of his finger during surgery. Looks cool. I wonder whether hospitals would find it to be cost-effective.
* Dimera: DP9, thromboxane receptor antagonist, treating CVD in post-menopausal women. Patent expiration of 2017. Successful in pre-clinical trials. Ready to enter Phase III. Looking for another $40M for Phase III. Sounds like a promising product, but I wanted to know more about the manufacturing and marketing strategy.
* Electrical Geodesics: Functional Neuroimaging. Create anatomically specific information about changes in brain function. Profitable (barely) in 8 of last 9 quarters. The presentation was focused more on the product than on the market opportunity, which seems to reflect the overall strategy of the company. I like to hear a lot of discussion about the end users, and I didn’t hear it.
* FloraGenex: AgBio company doing genetic screening for plants. Great presenter, great presentation! Led with a memorable customer story (Heinz trying to save money on corn syrup) and how the company is trying to solve the customer’s problem. Simple value proposition: speedy identification of plant markers for customers using genetic sequencing. Detailed explanation of market and of customer, and how the technology will serve both well. Bravo!
* MolecularMD: Molecular diagnostic testing for CML and NSCLC. Plans to expand from assays and pharma services to physician services and kits.
* Vesticon: Med tech company working on vertigo diagnosis and treatment. Planning to deepen sales to existing customers with upgrades and portable versions.

Today, I’m attending Burrill & Company’s Pacific Northwest Life Sciences Meeting, and will try to throw up a few live blogs while I’m here. This morning, Burrill’s CEO is currently presenting a state of affairs of the industry. All in all, a good summary of the industry. Mr. Burrill had a lot of ground to cover in only an hour, and I think he may not have had a chance to go into as much depth as I would have enjoyed, which is too bad. A quick summary of the points so far (and my thoughts in parentheses).

* blockbuster model switching to personalized medicine (sure)
* biotech is beating pharma in return to shareholders (a myth in my view — taking out AMGN and DNA, biotech hasn’t been a particularly good bet for shareholders — and most biotech vs pharma graphs don’t include the myriad failed private biotechs)
* biofuels are booming (the investments are booming, and it is a ferociously cool idea that I hope works eventually, but my understanding is that nobody has gone carbon-negative yet, and there are serious roadblocks in this technology at present)
* costs are going up because people are living longer (yes, and managed care is transferring cost and risk away as efficiently as it can, which is shaping how people seek care for themselves)
* prescription drugs are only ~10% of health care costs, far from the major driver they are usually painted as (great point, great insight)
* R&D productivity is going down — the famous R&D spending vs NME’s graph — and it is attributable to the FDA’s new attitude toward risk (agree, but I think that druggable targets are also harder to find than they used to be, and the low-hanging fruit have been eaten)
* big companies can’t innovate (I think that an intelligently designed organization can do it — I was impressed by Garnier’s recent article in HBR about GSK’s R&D redesign, and I wonder if it’s working)
* heading to rational drug design by 2020 due to pharmacogenomics (RDD will require substantial advances in systems biology first, not just pharmacogenomics)
* lots happening in China (agree — IP protection policy will determine the future of biotech there)
* FIPCO replaced by VIPCO (yes — sort of. I think VIPCOs will work better when there is a low degree of informational asymmetry between partners. That means situations where the product’s mechanism or technology is familiar to the licensor. FIPCOs will be a better plan for companies with truly novel technologies, because they will get better product support from within than without.)