Burrill's Predictions
So, according to a note released earlier this week prior to his appearance at the trade show, Burrill described the year for biotechnology in 2004 as a roller-coaster ride with “pharma under assault, the FDA in disarray,” and capital markets not liking anyone but Genentech.
These are the driving forces for the next few months for biotech, according to Burrill:
-- Strategic partnering and M&A increases as will their transaction values and for earlier stage compounds.
-- Stem cell research will continue to progress. Science will drive pharmacogenomics into the forefront -- personalized medicine/theranostics will continue to make progress.
-- New tools and technologies for genomics, proteomics, and systems biology will be developed, leading to 'better understanding of proteomics and how our biological systems really work' that will, in turn, bring personalized medicine further, faster, and cheaper.
-- Buyers with strong economic incentives, whether they are managed care companies or the government, have a real interest in prevention. There is evidence that even Medicare is reaching out to pay for prevention as a vehicle to manage costs.
'We're going see a lot more than just rhetoric around preventative medicine with dramatically increased value for diagnostics as a result,' Burrill said.
Burrill's data points:
-- Chronic care now almost accounts for 80 percent of US healthcare costs;
-- Pharma shareholder return since 1998 is down 26 percent;
-- Preclinical deal values in 2004 averaged $72 million with 10 deals in excess of $100 million;
-- Failure rate of drug candidates reaching Phase III of clinical trials: 50 percent;
Industry fundraising from July 2004-July 2005
IPOs fell 48 percent to $803 million from $1.5 billion
Follow-on financing fell 29 percent to $3.1 billion from $4.4 billion
PIPE (private investment in public equity) fell 44 percent to $1.6 billion from $2.9 billion
Debt increased 2 percent to $7.3 billion from $7.2 billion
Venture capital investments fell 13 percent to $3.1 billion to $3.5 billion
Partnering improved 24 percent to $12 billion from $9.7 billion
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