State of the Biotech Industry: Burrill’s Biotech 2013 Report

To open his Super Session at the 2013 BIO International Convention, G. Steven Burrill, CEO of Burrill & Company, injected some humor for the hundreds of attendees in the audience, saying after 45 years in the biotech industry, 27 years authoring the Burrill State-of-the-Industry Report and 20 years of presenting the report at Convention, he was determined to get through 228 slides in 90 minutes. And, he delivered, providing a comprehensive snapshot of the industry in his presentation of the report Biotech 2013: Capturing Value.

At the outset, Mr. Burrill stressed the importance of the terms “outcomes” and “values,” which he explained are becoming more important than the historic focus on “procedures” and “costs” within the industry. He also noted that the industry is headed for growth, with the Burrill Select Index showing an increase of 35 percent since 2011, with small cap companies outpacing large cap companies. Mr. Burrill also explained how various political decisions impacted the industry, including the Supreme Court’s upholding of President Obama’s Affordable Care Act, allowing companies to start preparing for its regulations.

Mr. Burrill focused on how biotech firms need to capture value as opposed to just creating value. He discussed the factors that can influence value, including those that seem less obvious, including a company’s geographic location. He also noted that companies can find opportunities for value in the repurposing of old or failed drugs and expanded indications. Another large development within the industry over the past few years that Mr. Burrill called attention to was the trend that finds patients becoming more like direct consumers through the “retailization” of health care, with telehealth, smartphone apps and ambient intelligence taking center stage as the community transitions from fee-for-service to value-based care.

On the funding front, one of the more pertinent findings presented in Biotech 2013 was the replacement of VCs by angel investors, government funding and partnerships with non-profit organizations. Amid a total of US$130 billion in capital raised in 2012, Mr. Burrill mentioned that IPOs are no longer as popular a source of funding as they have been in the past. Additionally, Mr. Burrill highlighted the pressures the health care community is facing from an agricultural and energy standpoint, highlighting competition among nations to cultivate land and resources within continents such as South America and Africa. Despite these challenges, Mr. Burrill remained optimistic about the enormous opportunities that come with agricultural biotech, saying the biotech industry is best prepared to solve some of these larger issues because no other industry is equipped to solve these challenges than the biotech industry is. Mr. Burrill attributed this to the widespread nature of the innovation in development within the biotech industry, spanning health care, technology, food and agriculture, energy and other areas.

Mr. Burrill closed his session with a sense of optimism thanks to the “tremendous opportunities” that the biotech industry offers, and how the key lies in companies’ abilities to show payers that they can create value. He ended, “Value, like beauty is in the eye of the beholder, and the beholder, in this instance, is the payer.”

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