Biotech is poised for a breakout year, but will 2006 be the one? While 2005 wasn’t an unqualified success, it had more ups than downs. The industry raised $17 billion in financing and $15 billion in partnering capital, according to Burrill & Co. The industry’s market cap for publicly traded biotech companies topped its previous high set in the glory days of 2000. Perhaps this really is the beginning of an industry resurgence. Biotech is growing faster than its pharmaceutical brethren. There are now at least 12 biotech companies with revenue of more than $500 million, led by Amgen. Biotech drugs are creeping up the list of top-selling drugs, and there are fewer notable biotech drugs facing patent expiration, an annual challenge in the pharma world. It’s not all rosy, however. IPOs were scarce, with only 17 in 2005. Even more telling: most of the companies that were able to go public were priced at the low end of the pricing range. The industry still has some work to do before more public and private investors buy into the sector. It appears, however, to be only a matter of time. The industry is wrestling with many important and controversial issues. Some of the most visible are embryonic stem-cell research, cloning, and human longevity. Proponents from both sides of these issues have strong support, including legions of followers who are willing to go all-out for their cause. Many biotech issues are affected by political, judicial, and religious forces. Bioethics will indeed play a crucial role in the industry’s future. The industry faces challenges on a global scale, such as a possible avian flu pandemic. Recently, the Pandemic Flu Bill was passed, which appropriated $3.7 billion to the cause. Fears surrounding acts of bioterrorism are omnipresent, and it’s impossible to know exactly what menacing substances are out there and in whose hands. There’s certainly enough work to keep this industry busy indefinitely. Nations are well aware that they must cooperate with one another. Jim Greenwood, President and CEO of BIO states: “We have a long way to go here.” He ranks fostering a cooperative global environment high on his to-do list. “Policies made by international organizations affect us all in terms of cost and distribution and so forth,” he says. Some concepts, such as personalized medicine, are still flying under the radar of mainstream politics and public awareness. Dr. Edward Abrahams, executive director of the Personalized Medicine Coalition believes that most drugs don’t work for many in the population, and that personalized medicine represents a better model. He says discovering the genetic predispositions of patients will provide for better treatments. Experts expect personalized medicine will gain more traction over the next few years. So which regions show the most promise? John Carroll of FierceBiotech listed the top five for 2006, and there are a couple of surprises on the list (see page 9 for more details). The list includes California, Maryland’s I-270 Tech Corridor, New Jersey, the Singapore Biopolis, and Wisconsin. Other regions, such as Massachusetts and North Carolina remain very strong, and Illinois, Ohio, and Alabama are motivated and moving toward becoming top regions. Daniel Limbach Managing Editor VIEW publications letter from the editor April 2005 Daniel Limbach We look forward to discussing the latest industry trends at BIO 2006. Please stop by Booth 2769 to say hello.
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Letter from the Editor
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