Risk-averse investors threaten drug development
Monday 16 June 2008
New drug development by the biotechnology industry is threatened by increasingly risk-averse investors and intensifying competition from generic rivals, a survey shows.
A major cause of investor wariness is the growing caution of the US Food and Drug Administration in granting marketing approval for new drugs. This in turn cuts into the time that the treatment is protected by patent, the survey, by the law firm Marks & Clerk, found.
Of the biotech and pharmaceutical executives surveyed, 90 per cent said that secondary and further funding would become harder to secure. Investors will instead focus on less-risky, later-stage drug development in an attempt to limit their risk exposure, prompting biotech companies to switch to these activities, the survey found.
Where capital is available, the terms are set to become more onerous for companies seeking investment.
The survey found that 80 per cent of respondents expected key investors to seek a bigger equity stake or to look to secure their capital against drug-makers' intellectual property assets.
Some 78 per cent of respondents stated that the climate for biotech innovation had got worse over the past year, with 89 per cent predicting that small or early-stage companies would either fail or be bought out at unattractive levels.
Competition from generic drugs manufacturers is also putting the industry under pressure, with three-quarters of respondents reporting that patents are harder to protect against generic producers than in the past.
Dr Gareth Williams, partner at Marks & Clerk and co-author of the report, said: "Biotechnology represents the future of modern medicine, where yesterday's innovators now struggle with dwindling pipelines, generic competition and a chequered R&D record.
"Whilst the long-term view has not changed, we are seeing a short to mid-term funding gap in the current climate, which poses a genuine risk to essential, early-stage research and development."
The survey is based on the views of 484 responses from senior executives in the industry, mainly in the US and the UK.
- 1 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 2 Tower Bridge glass walkway 'smashed' by night-time visitor dropping bottle of beer
- 3 Anti-gay hate preacher accidentally tweets 4,000 followers cartoon clip of him 'confessing' to be a 'homosexual sodomite'
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 5 Grayson Perry: London needs affordable housing because 'rich people don't create culture'
Anti-gay hate preacher accidentally tweets 4,000 followers cartoon clip of him 'confessing' to be a 'homosexual sodomite'
Woman opens professional cuddling shop – gets 10,000 customers in first week
Grayson Perry: London needs affordable housing because 'rich people don't create culture'
Kenya bus attack: Al-Shabaab militants slaughter 28 non-Muslims who failed to recite Koran
That Sugar Film director Damon Gameua receives shocking diagnosis after going on healthy sugar diet for just 60 days
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
France 'blocks' Russian sailors from boarding a warship
Revealed: How the world gets rich – from privatising British public services
Myleene Klass: Ed Miliband 'strikes back' by comparing UK's need for Labour's mansion tax to Hear'Say track
iJobs Money & Business
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...