As an attendee at the 2016 BIO International Convention in San Francisco (the world’s largest biotech and life sciences convention), Ben Wood (Senior Associate, Corporate Advisory) thought it would be useful to give a quick overview of some key themes arising from the convention:
- An inevitable area of focus is the upcoming US election in November. While Bernie Sanders has not yet conceded defeat, Hillary Clinton’s win of the Democratic primary in California has effectively secured her place as the Democratic White House nominee. The focus now turns to a head-to-head with Donald Trump. A BIO key note speech on Wednesday provided some further insight into the likely campaigns by each nominee, but with an acknowledgment that the end result is still a big unknown – with Mr Trump having defied odds to date and a view that it will not be a ‘normative’ election. That said, it was suggested that both candidates are likely to have a high level of focus on the biotech industry.
- While perhaps not as prominent in current debate in Australia, a significant area of focus (and contention) in the US is ensuring patient access to new affordable drugs and treatments, at the same time as not stifling incentives for innovation and investment by biotechs. A potential ‘trust gap’ has been flagged between patients, drug developers and payers.
- The importance of ongoing collaboration between key stakeholders (including Governments, big pharma, earlier stage biotechs, and payers), to not only address the issue of drug costs and access noted above (e.g. to create tailored value propositions for each drug), but also to ensure ongoing pursuits with translational research, more effective commercialisation of new drugs and treatments, and removing regulatory barriers to technological advancements.
- Awareness that the biotech and life sciences industry is ‘coming down the curve’ from highs in 2014, with July 2015 sighted as the turning point in the US. This is at the same time as acknowledging that the industry is likely to remain a significant contributor to the US economy (which naturally aligns closely with Australia). Irrespective of market trends, a common theme is ensuring to take a ‘long-term view’ (a consideration which is relevant across industries).
- Coupled with the softening of market conditions, a potential ‘drying of the well’ was flagged for early stage biotechs in a separate panel session with some US VC funds and angel investors. Investment in biotech (as opposed to technology) has been relatively flat in the US, with the level of investment down 15% from 2008 and indications that a number of investors are now shifting to larger companies in the industry. That said, some emerging trends, including the emergence of ‘micro VC’ firms and further recent developments to US crowd-funding laws (with a new ‘IPO light’ model), were identified as potential further financing vehicles.
Other topics of interest included the ongoing rise of digital media (as a means of communicating with customers in a patient-centric world) and developments with the Trans Pacific Partnership.
It will be interesting to see how some of the above themes filter into the Australian marketplace in coming months. In particular, the upcoming US election, coupled with the pending UK referendum on a Brexit, will likely have broader implications across industries outside biotech and life sciences – the next four to five months are likely to be a ‘wait and see’ for investors and other key stakeholders.
If you would like to learn more about BIO, and are interested in a more detailed debrief of this year’s convention, please click here to register for a breakfast hosted by McCullough Robertson, EY and Life Sciences Queensland at which the above and other relevant issues will be covered.