Peel back the glossy façade touting innovation, education and other noble
missions, and you start to see what really makes the drug industry go. On a
panel today to discuss how to “derisk” the biopharma business model, four CEOs
talked cold, hard reality at the BIO International Convention. For example:
Don’t even bother forming a startup around a new, exciting medical innovation
unless you have extremely deep pockets, because other people with deep pockets
are likely to slam the door on your toe. “If you want to develop a new
molecule or a new structure that’s never been in man, good luck,” said
Spectrum Pharmaceuticals Inc. CEO Raj Shrotriya. OncoGenex Technologies Inc.
CEO Scott Cormack said that once a bias against a certain new area of drug
discovery gains momentum, a sort of anti-bandwagon in the industry begins to
form.
Another dose of reality: “If you have something with value, you’ll get sued,”
Cormack said. He said he preferred to think of it as a badge of honor. How’s
that for collaboration and innovation? Industry veteran Jay Lichter, now
running a tiny startup called Akesis Pharmaceuticals Inc., said the inevitable
lawsuit, probably from Big Pharma, is difficult but necessary to prepare for.
“How do you plan for the meteor that’s going to hit you in the head?”
Apparently, patent lawyers work better than giant space lasers.
As the panel wound down, the participants denied they want to become “Big
Pharma” companies, showing independence, spirit and pluck, right? Well, maybe.
Cormack acknowledged he wouldn't say no to selling out if the price was right.
Shrotriya didn't mince words, either. “If someone signs a check worth $1
billion for my company, I’m gone,” he said. “My company is gone. My investors
are gone. M&A is the way of the world, and we’re ready to be acquired.”
—Alex Lash
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The unfortunate essence of the stuck biopharma model. The answers would probably involve turning away from the "better & expensive" business model to the "cheaper and better" approach. Those innovations are though tantamount to heresy in the current industry and may have to come from leaders outside the field (IT anyone?). It would also include a reduced IP protection in order to spur innovation, which is not the party line of biotech right now.