A standing-room only crowd was captivated as a panel of life science and venture capital luminaries discussed the past, present and potential future of financing and deal-making that has and will continue to stimulate innovation in the industry. Driving the conversation was the fact that the past five years have yielded one of the most significant bull runs in the history of the biotechnology industry, along with the larger question surrounding sustainability.
Glen Govannetti, global biotech leader at Earnest and Young, kicked off the discussion by presenting several key headlines that provided insight into the current status of the biotechnology industry and motivators for the bull run:
- Innovation capital hit a record high in 2017 – venture up and IPO’s rebounded
- Approvals for novel therapies are happening at a faster pace
- Drivers include outstanding science and new products
- There has been no radical changes to drug pricing (yet)
- There are new sources of capital; fewer IPO’s and public companies in other sector
- M&A remains a strategic driver in the sector
“All of this translates out to an unprecedented period of capital availability for the industry,” noted Giovannetti.
Giovannetti then moved on to moderate a lively discussion around the sustainability of fundraising and investment among the panelist who included:
- Katrine Bosley, CEO at Editas Medicine
- Jean-Francis Formela, Partner at Atlas Venture
- John Maraganore, PhDChief Executive Officer at Alnylam Pharmaceuticals; and
- Dennis J. Purcell, Founder and Senior Advisor at Aisling Capital
“This environment right now is fueled by the quality of the science and the amazing innovations we have out there right now,” said Maraganore. “As long as that continues, there will be a sustainability around capital raising in the industry and we will be able to deliver transformative medicine to patients.”
Throughout the discussion, panelists emphasized the importance of having a “long-game mindset” and exhibiting patience when building a biotech company, which traditionally requires 20+ years to re-coop investments and turn a profit.
“Ask yourself who you want to have as investors two years down the road,” suggested Bosely. “Always be looking ahead. Successful companies have the long-term view.”
And, although it’s certainly helpful to be located in industry hubs such as Boston, it’s not 100% necessary in today’s environment. There are many small pockets of innovation across the US and abroad. You just have to work a little harder to build the right relationships.
Overall, there is strong support for the theory that the changes in the industry over the last two decades have enabled a “new normal” that is intrinsically a more robust biotechnology climate. Time will tell. But, the panelists were ultimately feeling bullish about the sustainability of capital investment that will fuel the advancement of transformative medicine for the foreseeable future.