Tuesday, April 14, 2009

A Gloomy Outlook at Mass Biotech Council's Annual Meeting

Kind of a depressing way to start the day…

The Mass Biotech Council’s Annual Meeting began with an overview of the group’s newly-issued strategic report, which observes that biotech in the Bay State is likely to undergo a serious shake-out in 2009. According to analysis by Deloitte and L.E.K. Consulting, half of all public biotech companies in the state could run out of cash before the end of this year, and one-third to one-half of all private companies will be out trying to raise money in 2009.

By the end of the day, things hadn’t gotten much sunnier. A panel on the economic outlook for the next year seemed to conclude that things will get worse, not better, for most life sciences companies over the coming year.

“If you have cash flow, are close to cash flow, or are cash flow positive,” the outlook isn’t so terrible, said Jonathan Fleming, managing general partner at Oxford Bioscience Partners. What’s happening right now, Fleming said, is kind of like a forest fire. A lot of things will burn, but that creates opportunities for new breakthroughs, he said.

MIT Sloan School economist Ernie Berndt suggested that companies working on diagnostics and vaccines will likely feel more wind at their backs than others. But Berndt noted that while disease foundations (like the Gates Foundation or the Michael J. Fox Foundation) have been ardent supporters of drug development over the past few years, that funding seems to be slowing in the current economic climate.

There was a smidgen of good news from the panelists. Berndt said that the pathway to bringing follow-on biologics to market “is going to be much more difficult than predicted.” Fleming said Africa is an interesting market for vaccine development, mainly because the US government has been so supportive with its financial backing. Berndt said that as big pharmaceutical companies are increasingly dedicating their resources to developing blockbuster drugs, opportunities exist for small companies to come up with “niche-busters” for more focused groups of patients.

“You guys are painting a rosier picture of today, and a more negative picture of a year from now,” said moderator Bob Buderi. “The President has been saying the opposite.”

Things could be worse, quipped Frank Hatheway, Nasdaq’s chief economist: at least you’re not in real estate, or a community banker in Michigan. Not sure that made people feel much better…

The day wrapped up with a quick visit from Governor Deval Patrick, who tried to jawbone the despondent agglomeration into hiring union contruction workers for any expansion projects they might be planning. “One out of every five people claiming unemployment benefits are from the building trades,” the governor said. They see a billion dollars of public funding going into the life sciences field, and yet “they don’t feel they get a fair shot at jobs on your projects,” he said. “I ask you as a partner, a friend, and your governor, to give union workers a fair chance to compete.”

Gov. Patrick ended with what I thought was a nice phrase: “Innovation is our edge” in Massachusetts. Sectors like biotech, cleantech, health care, high tech, and smart manufacturing “will be our path out of this recession and into a strong and secure economic future.”

That, at least, offered an upbeat segue into the cocktail hour.

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Monday, June 16, 2008

Patrick's Biotech Bill: The Decade of Truth

Todd Wallack has a great piece in this morning's Globe about the new $1 billion biotech stimulus initiative, which becomes law today.

Wallack writes:

    The bill includes $250 million in tax incentives for companies, $250 million in grants, and $500 million for infrastructure, much of which is earmarked for the state university system. Several local biotech companies, including Shire PLC, Genzyme Corp., Wyeth, and Organogenesis Inc., stand to directly benefit from the legislation.

    [Gov. Deval] Patrick said the legislation gives him a powerful platform to sell Massachusetts to biotech leaders - encouraging more companies to expand or set up shop here.

    "We've got an awful lot to offer," Patrick said in an interview. "We are all about selling it."

Today, biotech is a pretty small (but influential) industry in Massachusetts -- about one percent of the state's workforce. Whether this billion bucks can be invested intelligently is the question that everyone in the industry was asking this past weekend at Convergence. Not everyone's optimistic. And we're not likely to know whether this money has really moved the needle for a decade.

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Wednesday, May 28, 2008

Boston's Biotech Tycoon

If you want to understand the story behind one of Boston's biggest biotech success stories, Genzyme Corp., Boston Magazine offers this great profile of CEO Henri Termeer, by Geoff Gagnon.

A few months ago, I was talking with some biotech execs who observed that there has never been an obvious #2 executive at Genzyme to succeed Termeer, who is 62. (Several possible successors have come and gone.)

But Gagnon's article contains an interesting detail: Termeer's mom is still alive, in Holland, at age 93, offering him advice. So succession may not exactly be a near-term issue for Genzyme.

Gagnon writes:

    At 93, [Mrs. Termeer] still keeps a close eye on her son, and on his company. (She's become a frequent visitor and a sort of mascot at Genzyme's plant in Belgium, not far from where she lives.) The two speak at least once a week and the conversation is rarely laden with idle pleasantries. Mrs. Termeer has a point when she calls, and she tends to get right to it. The impulse is the same when the family gathers for its annual fall reunion along the Dutch coast, in the province of Zeeland. Tradition dictates that the Termeers each rise at the table to regale the clan with a little speech. Without fail, the matriarch's chats are the most, well, weighty. "We all cringe a little when she speaks," Termeer says. "There's usually a big moral angle to it. She's quite serious."

    So Termeer wasn't terribly surprised by the call he received a few years back. His mom sounded agitated. She had read about Dutch patients who were relying on free infusions of an experimental precursor to Myozyme to treat their Pompe disease, a rare disorder that shrinks sufferers' muscles, eventually crippling their heart and lungs. The news suggested that Genzyme had plans to stop the program. These were Termeer's countrymen, and such apparent callousness was red meat for the Dutch politicians who denounced him in parliament. "She wanted answers. She wanted to know what I was going to do," Termeer says.

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Friday, April 11, 2008

Understanding Yesterday's Millennium Pharma Deal

The acquisition yesterday of Millennium Pharmaceuticals by a Japanese firm for $8.8 billion is a big deal -- the biggest ever in the Massachusetts biotech industry.

The Globe's Jeff Krasner has some really solid analysis of Millennium's saga, which began with a lot of lofty predictions about the power of genomic information. Krasner writes:

    Nobody did more to raise those unrealistic expectations than Mark J. Levin, Millennium's cofounder and longtime chief executive. In December 2001, he told Technology Review that Millennium would use genomics to become wildly successful. He said: "Over the next five to 10 years, our goal is to become a company that's leading the world in personalized medicines, a company that is leading the world in productivity, a company with a value of over $100 billion, a company that has five to 10 products on the market that are making a big difference in people's lives, a company with the strongest pipeline in the entire industry."

    But beyond building lavish headquarters and striking licensing deals worth hundreds of millions of dollars to Millennium, the company didn't produce. Its two cancer-fighting drugs, Campath and Velcade, came about the old-fashioned way: Millennium bought the smaller companies that developed the drugs. Millennium has since sold its rights to Campath to Genzyme Corp.

In a column from last August, I talked about Millennium as a font of big picture, deal-making CEOs for smaller biotechs, including Alnylam, Infinity, and Tempo.

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Monday, October 22, 2007

Una Ryan's Biotech Co. to Merge with NJ Company

Avant Immunotherapeutics, the Needham vaccine developer run by Una Ryan, a former chair of the Mass Biotech Council, is merging with a New Jersey company called Celldex Therapeutics. From CNN Money:

    Following completion of the transaction, Avant shareholders will own 42% of the combined company and Celldex shareholders will own the remaining 58% on a fully diluted basis.

    Avant, which plans to effect a reverse stock split as part of the deal in order to maintain its Nasdaq listing, expects the transaction to close in the first quarter of fiscal 2008.

    The combined company is in the process of developing a number of products, including vaccines for cholera and Salmonella typhi, the cause of typhoid fever, as well as a brain cancer immunotherapy. It will also have a commercialized product, Rotarix, an oral vaccine developed in collaboration with GlaxoSmithKline. (NYSE:GSK)

Here's the official press release and Webcast about the deal. Ryan remains CEO. Sounds like Celldex's vaccines will now be manufactured at Avant's facility in Fall River, MA.

In August, Avant received a delisting notice from Nasdaq, when its market value fell below $50 million.

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Wednesday, October 3, 2007

The inquisition begins: Coughlin under the microscope

Frank Phillips of the Globe reports today that the State Ethics Commission "has launched a formal investigation to determine whether the new president of the Massachusetts Biotechnology Council, Robert K. Coughlin, violated conflict-of-interest laws when he entered job talks with the industry association while continuing to work as Governor Deval Patrick's economic development undersecretary, according to sources with knowledge of the investigation."

His story says that the Mass Biotech Council received subpoenas last week asking for e-mail and phone records. But the worst punishment the Ethics Commission can dole out is a $2,000 fine, if Coughlin is found guilty of having violated the state's conflict-of-interest law in interviewing for his current job.

So far, this hire has been a complete disaster for Mass Biotech...in part because it totally hamstrings (at least for now) Coughlin's ability to work the media and elected officials on the Council's behalf. At best, they've been paying him for a month to learn more about how the Council and the biotech industry operate, and organize his desk blotter.

Earlier blog posts on the issue are here.

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Sunday, August 26, 2007

Today's Globe column: 'Why biotech CEOs need to think like Steve Jobs'

Today's Globe column deals with the importance of being able to sell a big vision in life sciences -- especially when a start-up is trying to pioneer a new area of science.

Among the CEOs I mention as "poster child" communicators are several alumni of Millennium Pharmaceuticals, including John Maraganore of Alnylam, Steve Holtzman of Infinity, and Alan Crane of Tempo Pharmaceuticals. Then you've got Christoph Westphal of Sirtris, and Josh Boger of Vertex. All these guys have elements of Steve Jobs' ability to communicate something ambitious and exciting -- something that is sorely missing among tech companies in New England right now.

The video clip features Alan Crane explaining how Tempo is using nanotechnology to engineer a new kind of cancer drug.

Finally, a few quotes that didn't make it into the edited piece....

“Someone who is a great storyteller can win people over with relatively little substance,” says Michael Gilman, formerly executive vice president of research at Biogen Idec. “But other people tend to be rubbed the wrong way by it.”

“The scientist in me is never going to make assertions that I don’t think I can back up with data,” says Gilman. “That’s just the way I’m wired. If you promise too much and disappoint, it’s not good for you in the long run.” Gilman founded Stromedix, Inc. of Cambridge in 2005, licensing a product that Biogen Idec had started to develop. It’ll begin trials later this year.

“Companies undergo a brutal and challenging transition when they’re forced to be evaluated on the merits of their products,” says Steven Dickman, CEO of the consultancy CBT Advisors. Dickman worked with Alnylam in its early days...

That transition hasn't quite happened yet for all of the companies I mention in the piece; while they've got drugs in clinical trials, none are yet on the market.

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Monday, August 13, 2007

Mass Biotech Council Picks Another Pol

The Mass Biotech Council has picked former Massachusetts State Rep Robert Coughlin as its new president. Coughlin has been serving as undersecretary of business development in the Deval Patrick administration.

Here's a quick roundup on Coughlin:

Coughlin starts in October. No word whether Mass Biotech is paying him Tom Finneran's old salary, which was $416,000.

(Photo of Coughlin courtesy of Mass Biotech Council.)

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Wednesday, August 8, 2007

The Globe's new biotech reporter

Steve Heuser, who I thought picked up the biotech beat amazingly quickly at the Globe, is moving over to the paper's Sunday Ideas section.

Taking over biotech duties, as of August 20th, will be Todd Wallack.

I've known Todd since he was a business reporter for the Boston Herald in the late 90s. He then moved West to work for the San Francisco Chronicle, where he worked on an important series of stories about high pay and secret perks being doled out to the University of California's Board of Regents, as tuition costs were skyrocketing at the universities they governed. At the Chronicle, he developed into one of the country's foremost "computer-assisted reporters," using databases to uncover stories no one else was telling.

Todd came back to Boston last year, and has been covering tech for the Boston Business Journal. He also has a blog. I'm really glad the Globe got him to cover one of the most active business sectors in the region...a sector with national and global relevance.

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