BIO2009 - CurrentPartnering reports
Date of publication: May 12, 2009
CurrentPartnering was present at BIO2009 in Atlanta, Georgia, reporting on the major developments and updates coming out of the convention center.
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In review
The unofficial theme of BIO 2009 was 'how to survive the economic crisis' with numerous talks on how to sell your business, save money and partner during distressed times.
The take home message is that only the fittest shall survive, or as Darwin pit it:
It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change Charles Darwin
Attendance was down in most parts of the convention which is not surprising. However, the Business Forum seemed as busy as ever, so will continue to be the best place in the USA to meet prospective partners.
Thursday 21, 2009
The final day of BIO2009 has arrived and the halls are very quiet this morning following the successful Gala Reception at the Atlanta Acquarium last night.
Sessions were for the tough and the brave this morning and included:
- Effectively managing multiple deals across a technology platform. The session sought to explore how to maximize partnering value through the creation of multiple deals based on a core technology platform, how to successfully work with multiple partners, and discuss maximizing transaction value for all stakeholders.
Wednesday 20 ,2009
Options, options, options - that is the current buzz-word around dealmaking at present. During an early morning session, GSK discussed its preference for option-based discovery stage dealmaking, allowing its partners the independence to build and grow their company but with GSK having exclusive option to license the outcomes of the discovery process.
Since 2006, GSK has signed sixteen discover stage option deals, far more than their rivals. However, it seems that they are onto something - others are talking about following suit. The benefits for biotech are manyfold - they get a cash injection, obtain company lvel endorsement, provides a catalyst for additional investment, and have access to expertise and knowhow otherwise not available.
Further reading: Option and Evaluation Agreements in Pharma and Biotech report
The following business development breakout sessions also took place:
- Maximizing value: a session on how the change in business models in response to the current financial situation was addressed by a number of bigpharma and VC personnel. The session sought to inform the audience as to how companies and investors have shifted their business and how biotech needs to reflect the new reality in its business approach
Tuesday May 19, 2009
BIO 2009 enters its second day with attendance numbers predicted to be down 35-40% accoridng to som reports. This is not surprising what with the current recession underway. However, the Business Forum appears as busy as ever with over 1,500 attendees. This really is the place to be if you are seeking partnerships. The hall is buzzing from 8am onwards with meetings scheduled every 30 minutes up to 5pm and beyond, depending on your stamina.
The following business development breakout sessions took place, including:
- Alliance managements role in building partner-centric organizations - a recipe for success? Well obviously yes, and all successul partners will say that bigpharma did it well. Where are those failed partners to sing their praises...
- BIotech M&A - how to sell your company in an environment of consolidation. I'm sure everyone wants to know. Surely it comoes down to having what someone wants and being willing to sell at a price the buyer is willing to pay. End of.
In addition, the exhibition hall opened to a muted reception today. Exhibiting with big budgets has seen better days - lets hope that those present give away less but do more actual business with interested parties. Afteral, that's what it should be about right?
Monday May 18, 2009
Waking up early has its benefits - you get registered before the crowds arrive. Over 17,000 delegates are expected to attend the first day of BIO2009 - and each needs to proceed through registration before entering the convention. Last time I looked, there was a queue stretching round the block.
Over 70 percent of the attendees are senior managers from some of the most innovative businesses in more than 60 countries and 48 states.
Businesses around the globe use this gathering as a chance for one-on-one meetings with current or potential partners. nearly 14,500 one-on-one meetings are predicted involving 1,7000 companies.
The biotechnology industry is well aware that business also gets done when having fun. This year’s festivities include an opening night reception with a high-energy performance by the B-52s.
The break-out sessions get started in the afternoon with the following being of interest to business developers:
A Marriage of Convenience? Big Pharma and Venture Capital
An excellent session where indiviuals from bigpharma and venture capital participated in a confessional on the problems facing two of the three participants (the other being the startup biotech) required for successful deals going forward.
The big problem at the moment is that pharma wants product not companies - it cannot afford to take on the complexity of a biotech company in order to extract the products required for future pipeline, wheras VC wants companies that it can sell to bigpharma ad thereby achieve its aim of 3-4 times return on investment. As one VC put it a mid-sized biotech has 70 personnel in admin/finance managing an annual loss of $150 million - a great way to spend money.
The solution? A few ideas were thrown on the table including DevCo's set up to manage a portfolio of assets, with bigpharma being in closer partnership with VC's to identify early-on those assets that will have real potential, backed up by an option position to those assets. The problem for bigpharma, is that option payments impact on todays' P&L and therefore R&D funds.
The coming months are going to be interesting as both parties agree the current model is failing, but a new model is required that allows bigpharma to access new opportunities at a reasonable price, and VC's to make a reasonable return on investment.
A penny for my thoughts? Both parties need to find a way of improving their early stage assessment of opportunities so avoiding unnecessary wasted expenditure on projects doomed to fail, whilst reducing the cost of development. That would allow bigpharma and VC to meet in the middle on valuations for new opportunities.
Further reading: Option and Evaluation Agreements in Pharma and Biotech
For Better or Worse, for Richer or Poorer: Partners Who Will Go the Distance
This session took place at the end of the day to a third full room, and it was disappointing to hear anything of limited value to those wishing to understand the attributes required to attract and retain a partner. More preparation please!
The day was rounded off by a reception in the Georgia Dome headlined by the B52s - what a great throw back to the 1970/80s. I bet pharma wishes it could also travel back to the glory days where double digit growth was the norm.
Sunday May 17, 2009
Atlanta, the city with the largest airport in the world welcomes BI2009 delegates with a day of heavy rain.
Not alot happening at the BIO2009 convention site - its setup day for the guys and gals working for BIO. The convention gets started proper on Monday morning.
However, there have been several business development workshops run in conjunction with the Licensing Executives Society, whihc have been well attended.
Time to practice those newly accrued skills when the Business Forum gets up and running at 10am on Monday morning.
Will be back with a breiffing on early happneings on Monday.