Lining Up for a Peek Inside the Crystal Ball

What does the future hold? In biotech that is the 10 million dollar question. Today, a panel at the BIO International Convention, chaired by Judith Hasko, a partner with Latham & Watkins attempted to answer those questions.

BIO attendees line up to get into a session on global biotech partnering.

Roger Longman tells BIO attendees about climate for biotech-pharma partnering.

In a room with standing room only, those inside, even those standing in the back could count themselves fortunate for outside in the hallway; a line was building up, with the one-in one-out rule. What were BIO conventioneers lining up to hear? Will larger biotech and pharma companies be seeking pipeline-enhancing, early-stage opportunities for long-term growth, or late-stage product opportunities? And, what are the current trends?

One of the speakers, Roger Longman, a managing partner with Windhover Information, addressed some of those questions. The most dramatic change, "We've seen over the last couple of years," he said, "is the increasing valuation of early stage deals that is deals before they've achieved clinical proof of concept." That is, added Longman valuations greater than 20 million dollars - for risky products with only a one in ten chance of success. "It's very unexpected," he said, "because early-stage stuff is so risky." There has also been an increase in the value of large molecule deals said Longman. After 2006 there were 6-7 million dollars of large molecule acquisitions - and those said Longman, are companies without products in the pipeline.

"The notion that you can buy and highly value a technology platform again is another way of showing that the kinds of difficulties that big pharma is now in, thanks to what Amgen, Genentech, and MedImmune were able to show years ago, which is that these large molecules have some significant value," said Longman. "The big challenge," he added, "a lot of us see is whether or not biotech can actually continue, on an ongoing basis, to supply the level and quality of molecules that big pharma needs." And that, everyone knows is something that only the future will tell.