By Dan Schell
By the time you read this, the 2009 INTERPHEX Conference & Exhibition (held March 17-19, 2009) will be long over, and the negativity and apprehension that permeated the event will be replaced by a feeling of financial excitement and hopefulness due to an improved economy.
Instead, I suspect issues such as industry consolidation, job layoffs, stricter/new regulations, and the impact of personalized medicine are still fresh on the minds of INTERPHEX attendees and vendors. Am I implying the show was a waste of time or a breeding ground for discontent? Not at all. Although I did hear the expected grumblings concerning the slow first day on the exhibit floor (likely due, in part, to New York’s St. Patrick’s Day celebrations), there was still an abundance of value to be found both in the excellent presentations and on the exhibit floor.
In my two days at the show, I met with 25 companies. Overall, I noticed three messages/themes that surfaced during most of my meetings. First, the economy is hurting everyone, but especially those small biotech firms that have been surviving on VC funds. In fact, INTERPHEX keynote speaker, Steven Burrill, predicts that 100 of the publicly traded biotech companies will go out of business or get taken over this year, but cautioned, “It is not time to write biotech’s obituary.” That point actually relates to the second message I heard: The pharma and biotech industries will soon look drastically different from what we’re used to. Again, Burrill commented on this issue by saying that he felt the current pharma model is “broken” and will disintegrate soon while more mergers and acquisitions (big and small) will help reshape the industry.
The continued focus on outsourcing was the final message I heard over and over at the show. There were lots of CMOs and CROs present, and many of the equipment manufacturers cited those companies as their primary targets. No surprise, I know, and this trend is only being exacerbated by the massive layoffs created by the economy. Less employees in-house at pharma companies means a higher likelihood that outsourcing may be the more economical alternative for research or manufacturing. Furthermore, with personalized medicine still being discussed as the wave of the future, the need for niche, smaller drug developments may further support the outsourcing model.
But just because outsourcing is still in vogue doesn’t mean the CMOs and CROs of the world aren’t feeling the sting of the economic slump. They, too, are looking for more economical ways to scale, either via equipment (e.g. buying used devices from companies going out of business) or by improving processes (e.g. Lean systems, ERP [enterprise resource planning] software). Further, I heard predictions that those types of companies are — like their customers — starting to experience consolidation, especially considering the glut of outsourcing facilities that have popped up in recent years.
INTERPHEX 2009 may not have been as big or had as many attendees as in the past, but that doesn’t make it any less relevant. I heard from more than one exhibitor that there seemed to be less “tire-kickers” and more decision makers seeking specific solutions. Couple that with a seminar agenda chock full of topical and valuable sessions, and you’ve still got an event that delivers on value no matter what the economic climate.