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Busy is good for business.
The JP Morgan Healthcare conference in San Francisco is the pharmaceutical world’s equivalent of the world economic development forum in Davos—an event CEOs and innovators schedule the rest of the year’s calendar around. It was with a heavy heart late last year the decision was made due to go to an all-virtual event. As a city, San Francisco was denied a vigorous financial stream, while participants were held back from in-person catchups and in-person partnering and deal making.
But much was maintained. The pandemic has raised drug production and supply to the forefront of both the general public and investors of various stripes—angel, institutional, strategic industrial, private investment in public equity, and public private partnerships.
This capital influx allows biotech companies the luxury of retaining control much longer (i.e., of staying private companies). In turn, this has pushed up sector valuations. So, while mergers and acquisitions remained somewhat quiet after a stellar 2019, licensing and partnerships predicated upon back-end payouts have proliferated.
This is in tune with a cultural shift during the two years of pandemic where all parties have kept in far closer conversation than had been previously typical. This built-up of trust and empathy for each other’s situations and goals, reduced barriers and resistance to license agreements. It’s been more collegial. Decisions are made with less uncertainty. Outsourcing contract development and manufacturing organizations (CDMOs) have space booked a year in advance, “the outside economic environment is encouraging,” Ramesh Subramanian, Chief Commercial Officer, Aragen, says. He affirms it is a buoyant time for R&D outsourcing. He specifies that this buoyancy can be attributed primarily to three reasons, “... increased funds flowing into [the R&D outsourcing] space, a high number of targets in the pipeline, and renewed interest in pharma R&D due to the COVID-19 pandemic.”
However you are placed coming out of the past two years, it is a certainty you are busy. And busy is good for business.
Vol. 35, No. 2
When referring to this article, please cite it as M. Hennessy Jr., “A License to Innovate,” BioPharm International 35 (2) (2022).