BIO2015: The next 'plastics' of biotech and a barreling towards another record M&A year
As the BIO 2015 International Convention came to a close on Thursday, panelists and presenters looked to the future of the industry. And a new report from inVentiv Health's consulting arm, Campbell Alliance, released yesterday suggests that 2015 will be yet another record for biopharma M&As and licensing.
What's the next 'plastics' of biotech?
In what was dubbed a "supersession" hosted by Scientific American for its Worldview collaborative edition (which showcases the 100 most influential people in biotech), moderator David Brancaccio of Marketplace Morning Report asked a panel of experts what they thought would be the next "plastics."
For the uninitiated: That's a reference to the iconic Dustin Hoffman film The Graduate, wherein one character tells Hoffman that there's "a great future in plastics." Brancaccio asked the panlists to describe in one word or phrase what they believed would comprise "a great future" in biotech.
The responses were interesting, to say the least. Karen Nelson, president of the J Craig Venter Institute, answer, "gut microbiology," explaining that there had been an explosion of research on the topic in the last decade alone. "There's still an untapped world out there to be looked at," said Nelson.
Lee Hood, president of the Institute for Systems Biology, said it was "wellness." That's a term that gets thrown around a lot in the healthcare sphere. For Hood, defining and really understanding what wellness is to begin with is fundamental to understanding maladies. And he knows a thing or two about that—his company is entrenched in so-called "P4 medicine," a systems medicine building block which aims to use blood as a broad diagnostic vessel and aims to provide a new approach to discovering drug targets.
Martin Naley, founder and CEO of Cure Forward, offered the only answer that we'd never heard of: "patient activation." That's the stated goal of his own company, and what it means, according to Naley, is having patients get "activated by [their] own data." This has been one of the major themes of recent conferences and plays into the idea of translational medicine via active health data monitoring and personalized medicine techniques.
2015 looks like it could set another record for M&As and licensing deals
Industry observers know well that 2014 was a record year for biopharma M&As, and given the first half of this year, that 2015 may be one, too.
On Thursday, a new report released by inVentiv Health's Campbell Alliance put some industry data behind that assertion, surveying some of the biggest dealmakers in the game about their intentions for the coming year.
"Based on the first quarter of the year, 2015 could be on the path to surpass 2014’s huge amount of dealmaking activity and become even more of a breakout year for M&A and financing," wrote the report authors. "In 2014, M&A activity was driven by small and mid-cap biopharma buyers flush with cash. Financing to small-cap (less than $1 billion) and private biopharma companies saw a significant increase in 2014, driven largely by a robust initial public offering (IPO) market.
"The momentum has continued through the first quarter of this year."
The report goes on to list some of the major factors driving M&As and licensing arrangements, including the availability of cheap cash, improving stock performance, the increased power of payers and burgeoning rebates, and the reduction of biopharma tax bases through inversion deals.
"The large differences among leading manufacturers’ tax rates creates additional mega-merger potential, exemplified in Pfizer’s rumored interest in merging with top-10 rivals from the European Union, such as AstraZeneca and GlaxoSmithKline," wrote the authors.
Here's a summary slide out of the report:
We'll have even more content and insight out of BIO2015 for you next week. Stay tuned.