"Don't ever let anyone say there is no capital for you," advised
biotechnology guru G. Steven Burrill, opening this year's Molecular Medicine Tri-Conference,
"and when they are passing it around, reach for it."
According to Burrill, the price of capital is
"pretty ugly," but for young companies, it is available and still makes the whole difference between an idea and a product. 2006 is a tough year for IPOs because
"The buy side is hurting," he explained. Some companies will simply have to lower their prices to make their IPOs happen. He predicted there will be more than 30 biotech IPOs in
2006.
He also warned that
"biotechs need to think globally from day one." That means keeping an eye on new overseas competitors as well as new markets. The term
"Chindia" has become a favorite in Burrill's vocabulary.
"The same postdoc you can get at a top U.S. university is available at one-tenth the cost in China or India," he pointed out. To be successful in this new environment, companies should also think of these emerging nations as their
partners.
In terms of investments, Burrill sees lots of opportunity in biotechnology. His own top interests now include nutriceuticals, personalized medicine,
"boomer"-related conditions such as memory loss, and pandemic diseases. Nutriceuticals, he pointed out, represent a $300 billion market. Meanwhile, baby boomers make up 30 percent of the U.S. population, which should fuel demand for drugs to treat age-related diseases.
"We are already in the period of personalized medicine," Burrill said, but that does not necessarily mean that
"the blockbuster is dead." Pharmacogenomic tests will be used to identify
"who needs Lipitor" and other medicines, he added. Such tests could just as easily expand markets
-- by identifying people previously not considered to need therapy
-- as they could shrink them.
Overall, the renowned VC/merchant banker/communicator sees great opportunity ahead, but some nasty potential snags along the way. Worldwide pharmaceutical sales are approximately $550 billion, he pointed out,
"but the world is mad at us for having expensive products." A major reason healthcare is so expensive is because there are so many new options, but that won't keep the public from resisting high drug prices, which is something entrepreneurs need to keep in mind as they draw up their business
plans.
Going forward,
"Getting reimbursement will be the most important thing," he said.
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