Top 10 Topical Issues in Commercial Biotech/Pharma

Here is a list of topical issues in biotech/pharma that we believe are interesting and which are likely to have a major impact.  The list is written by a UK-based observer, but clearly the US lead in biotech/pharma issues is acknowledged.

1. Scientific Reproducibility

Perhaps more than 50% of academic science is not reproducible.  That includes work published in top journals such as Science, Nature and Cell.  Many startups have found to their cost that the foundational science on which the company is based does not work.

2. Biosimilars

With biologics drugs becoming increasingly important biosimilars represent a huge opportunity.  However the FDA has yet to set up a system for biosimilar approval, and clearly there is a lot of lobbying around the issue.

3. Governments Negotiating Hard Over Drug Prices/Spending

The UK government and the pharmaceutical industry have agreed a 5 year deal which limits spending by the National Health Service on branded medicines to $19.25bn (£12bn) annually.  It illustrates the tougher line governments are taking on drug prices and spending.

4. Big Data

Biotech is gradually learning how to use big data.  Many data sets are unstructured and it is not always clear how to interrogate them.  However slowly researchers are learning how best to glean results and conclusions from huge amounts of data on gene expression, imaging results, disease progression, etc.

5. Capturing Value

The biotech industry has to realise that it operates within an ecosystem in which payers are becoming increasingly demanding and sophisticated.  In healthcare in particular payers are acting more and more like consumers with choices and so the economic and health advantages of a new biotech product has to be clear in comparison to existing competing products.  That means that even small biotech companies must have a sophisticated understanding of the market in which they operate and which products the market will accept.

6.  The Present US IPO Window

At least 39 US life science companies have successfully completed IPO’s this year, compared to 11 in the whole of 2012.  For some reason the investment community as whole thinks that biotech is worth investing in again.

7.  Early Stage Funding in Biotech is Still Low

Despite the IPO boom early stage funding for biotech is still low.  In the US there were only 102 first-time financings of life science companies, the lowest amount since 1996.  That is despite crowdfunding, corporate venture capital and the new businesslike philanthropies.

8.  Will Crowdfunding be Big in Biotech?

Crowdfunding has the potential to attract $1 trn or more and the US authorities are making it possible for biotech companies to use this source of revenue.  The company Poliwogg is setting up an accreditation system with defined targets for biotech companies that want to use crowdsourcing for raising funds.

9.  The Big Pharma Situation

Big pharma is restructuring its R&D, laying people off, working with academia in new ways, adopting more cooperative models and starting to venture into open innovation.  Clearly still major players in the biotech ecosystem despite their present troubles.

10. Transparency of Clinical Trial Data

Pharma is making huge strides to become more transparent about its clinical trials. It’s an issue that shows the complexity of their relationship with the public and government. They need to retain trust whilst at the same time protecting their commercial interests.

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