Wednesday, October 22, 2008

Mid-Atlantic Bioscience Companies See Crisis as Severe, But Survivable

2008 Mid-Atlantic Bio today announced that respondents to a pre-conference survey acknowledged the severity of the global credit crisis in affecting bioscience companies in the mid-Atlantic region, but believe it can be weathered with appropriate planning. 2008 Mid-Atlantic Bio will take place October 22-24 in Chantilly, Va. Dedicated to promoting the growth of biotechnology in the Mid-Atlantic region, 2008 Mid-Atlantic Bio is sponsored collectively by the mid-Atlantic’s most influential bioscience and investor associations, Mid-Atlantic Venture Association (MAVA), Tech Council of Maryland/MdBio (TCM/MdBio), and the Virginia Biotechnology Association (VaBIO). The conference attracts more than 700 senior executives from the life sciences industry, as well as investors, financiers, capital sources, international delegations, attorneys, service providers, and consultants.

In today’s declining economic climate, respondents said that obtaining adequate early stage, or A Round, funding is the biggest challenge to developing a bioscience company in the Mid-Atlantic region today. Access to adequate angel funding was also cited as a significant challenge.

“More than 90 percent of respondents believe the current state of the economy is serious and will significantly impact their enterprise, but that it is survivable and will ultimately rebound,” said Douglas A. Doerfler, conference steering committee chairman and president and chief executive officer of MaxCyte, Inc. “Our companies are taking the current decline very seriously and responding with swift and certain actions. This week’s meeting brings our life sciences community together to focus on these critical issues,” he added.

The poll showed that companies plan to survive the turmoil by looking for alternative forms of revenue while managing expenses, collaborating and more aggressively pursuing partnering opportunities, and aggressively pursuing private equity investment.

Respondents also foresee considerable merger and acquisition activity ahead involving life sciences companies and large pharmaceutical firms. When asked what they believed would likely be the ultimate outcome for a biotechnology company in the Mid-Atlantic today, two out of three predicted acquisition by “Big Pharma,” while only one in five believed companies of like sizes would merge. The remainder predicted companies would grow stand alone, independent companies with marketed products.

Respondents were also asked about one of the most hotly discussed topics in the biotech industry today - “follow-on” biologics, also known as “biosimilars” or “generic biologics,” which are under consideration by the U.S. Food and Drug Administration. Two thirds of respondents viewed FDA approval of a pathway for these products to be positive for the biotech industry.

“The survey results suggest that a majority of the biotech industry would view FDA approval of follow-on biologics as a positive development, observed Natasha Leskovsek, a partner with Cooley Godward Kronish LLP, and moderator of a Follow-on Biologics panel taking place at the conference on October 23. “Particularly in the current economic climate, a market with more participants may increase patient access and stimulate overall demand and further innovation, while ensuring adequate protections for innovator companies,” she said.

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