On Thursday, October 4, OLC attended the Xconomy Xchange at the Alexandria Center. The topic of the evening was Reinventing Biotech’s Business Model for the Big Apple.
Building a Life Sciences Company in New York
Sam Waksal, CEO, Kadmon Pharmaceuticals
§ How the industry use to work:
o make compounds, try and match to a disease
o take existing drug and alter
§ Biotech industry changed that
§ Pfizer spent $150 billion in a recent year and created nothing new- only made 3 acquisitions that year
§ Industry wide research and investment reached a record $65.3 billion in 2009 and there isn’t even a lot of innovation
§ 1995-2004, 941 new drug and biologics license applications were approved- only 311 were new molecular entities
§ Too many hired, few truly great scientist, so costs are incredibly high
§ What really good biotech companies do is focus on the science.
§ There’s only one company around now that has the same product: Coca-Cola
§ “The nature of technology is that the product is always changing. It’s just so rare that you’ll have the same product in five years.” Marc Andreessen
§ ImClone happened in NYC because Sam didn’t want to drive- not because of incentives or industry community
§ When Sam served on the Mayor’s Biotechnology Taskforce he pushed for more labs while University representatives asked for more housing for researchers.
§ There needs to be a will from the management or science teams founding companies to push to keep assets here, and there need to be places to put those companies. That’s why Alexandria is so great for the city, and they’re expanding next door.
Panel: Reinventing Biotech’s Business Model for the Big Apple
Kevin Kinsella, Founder Avalon Ventures
Jill O’Donnell-Tormey, CEO & Director of Scientific Affairs of the Cancer Research Institute
Dennis Purcell, Senior Managing Partner of Aisling Capital
Arthur Tinkelenberg, President & CEO of Enumeral Biomedical Corp.
§ Blueprint Health Demo Day this week- was a mad house, vibrant, energy
§ There’s a lot of money in NYC and the culture and living standards are hard great
§ Challenges of being in NYC for the Cancer Research Institute:
o world class competition (Sloane Kettering)
o not being the primary affiliation of those they contribute to (for Cancer Research Institute)
§ Non-profit role is funding actual science
§ Pharmaceutical companies get government push back, and often let scientists go with some seed funding- and often companies spur from that
§ Remicaid came from NYU
§ Advise from Arthur of Enumeral Biomedical Corp: focus on learning what you don’t know and delegating
§ The networks are here and investors are supportive
§ Capital needs to be deployed in different ways- people don’t want equity in biotech- can you blame them?
§ The biotech community in NYC isn’t robust, and though there are opportunities, real estate is expensive
§ There isn’t a VC community here that supports early stage biotech-New York has money, but no ideas that are right for that money
§ Audience: Pharmaceutical and diagnostic isn’t exciting for entrepreneurs- there’s a lot of “poverty,” bootstrapping and debt.
§ Audience: NYC is impatient about returns (the VCs) and that’s what is stunting it from growing its biotech industry
§ VCs aren’t yet ready to fund early stage ideas, Kevin from Avalon Ventures says investors are looking for 2-3 year returns, Jill of Cancer Research Institute says that’s where non-profit can help
§ Audience says we need new business models because the VC model for biotech is broken