Wednesday, January 27, 2010

DDP Live: Pharmaceutical, Biotech and Drug Delivery Investment trends in the Current Economic Climate

Moderator: Les Funtleyder, Healthcare Strategist, Miller Tabak & Company and Author Healthcare Investing: Profiting from the New World of Pharma, Biotech, and Health Care Services
Elaine V. Jones, PhD, Executive Director, Venture Capital, Worldwide Business Development, Pfizer, inc.
Brett Zbar, MD, Partner, Aisling Capital
Art Pappas, Managing Director, Pappas Ventures
Joyce Lonergan, Former Partner, SR One, Chiron and President, The Pine Cone Company

How is the environment for deal making in drug delivery?
One panelist: Venture funding dried up. They looked to take care of their current portfolio, so the bar for current investment went up. Inside lead financing went on instead of looking to the outside. In 2010, companies holding their breath can’t do this forever.

From the venture side, they’re looking to add more cash. Most corporate venture capitalists look to have strategic vent to investing. Those who’ve done it for some time would like to make a return for investors. Funding proposals weren’t accepted warmly.

The investor that in 2009, it was interesting because: they closed their fund, and although they thought they’d be cautious, they had four deals last year. In certain situations they found it hard to say no to outstanding opportunities. They’ve got quite q few new deals, if the right kind of innovation is presented.

How are evaluations? Are stocks going down or are they stable?
-In 2009, most companies avoided financing. They sent that question into 2010 expecting things would improve.
-Looking at a private company, private and public valuations don’t adjust the same. If someone is going out to invest money, the valuation question should be approached appropriately. There is conversation, investors look at the fundamental case and how can business be built? Then valuation should be approached?
-The world has changed, things are worth half. One structural challenge is that venture capitalists don’t know what they’ll get rewarded for. It use to be positive Phase II and Phase III data, but it’s currently an unknown.

Other notes from the session:
*Always know how much capital is required to develop a profit.
*If you're going to a market with a product that already has a generic in the area, be sure to have the reason why your product will be able to surpass it in sales
*Do hard experiments at the beginning of your product testing, and make sure it's done effectively. Be able to construct clear answers for your investors as as opposed to meso-answers.

What are other areas that are currently interesting to venture capitalists?
-Biologics/biosimilars and delivery designs
-Value added biosimilars
-Delivery of vaccines
-Novel antibody scaffolds
-Pain treatments

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