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Wheeling And Dealing At The 2015 BIO Meeting

Pharmaceuticals: Partnerships were the focus of trade association’s meeting in Philadelphia

by Lisa M. Jarvis
June 22, 2015 | A version of this story appeared in Volume 93, Issue 25

Investors are pouring cash into early-stage biotech firms. NOTE: Based on market capitalization at the end of 2014. SOURCES: Ernst & Young, S&P Capital IQ
A bar graph running from 2007 to 2014
Investors are pouring cash into early-stage biotech firms. NOTE: Based on market capitalization at the end of 2014. SOURCES: Ernst & Young, S&P Capital IQ

Ask executives where they spent their time during the Biotechnology Industry Organization’s annual meeting, held last week in Philadelphia, and you’re likely to hear the same answer: the partnering rooms. Inside rows of windowless cubicles, big and small companies alike were forging new relationships and cultivating the ones they already have.

That much of the activity in the sprawling Pennsylvania Convention Center took place behind closed doors reflects the feverish state of the industry. In a report released at the meeting, Ernst & Young found the life sciences industry at its healthiest in a decade: Mergers and acquisitions activity has surged, a record-breaking number of biotech companies are going public, and venture capital funds are abundant. Biotech firms raising the earliest rounds of funding brought in $1.8 billion last year, a 10-year peak.

That environment has given biotech companies bargaining power at a time when big drug firms are more reliant than ever on deals to fill their pipelines. “All of that comes together and makes it really competitive,” said Kevin Sin, director of oncology business development at Genentech. Deals are happening faster, at higher prices, and for riskier programs, Sin noted.

Drug firms are also trying to tap innovation earlier. During the meeting, GlaxoSmithKline unveiled two sizable investments founded in early-stage science. The big pharma firm committed $95 million to support launch of the Altius Institute for Biomedical Sciences, a Seattle-based nonprofit that will focus on gene control.

Altius will be led by the University of Washington’s John A. Stamatoyannopoulos, better known as Stam, who in 2012 showed that the human genome doesn’t just contain the recipes for making proteins; it also dictates how genes are controlled in different kinds of cells.

The potential to harness gene control moves genetics beyond simply identifying the important targets or mutations in disease to being able to probe “under what conditions and in which tissues” they are active, said Lon Cardon, GSK’s head of alternative discovery and development.

When up and running, the nonprofit is expected to house 40 to 80 scientists, about 10 of whom will come from GSK. The British firm hopes that Stam’s technology will provide insight into how its molecules work and, by extension, point to relevant measurements to make in clinical trials.

Separately, GSK and Avalon Ventures backed three new companies—Adrenergics, CadheRx Therapeutics, and Calporta Therapeutics—as part of their 2013 pact to jointly launch up to 10 new firms. Each biotech firm will receive up to $10 million in its first round of funding.

Meanwhile, Johnson & Johnson announced 17 partnerships with academic institutions and biotech companies. The deals, which bring J&J new drug discovery tools, span small molecules, antibodies, and RNA-based therapies.



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