Magazine Article | October 1, 2009

Innovation & Money

Source: Life Science Leader

By Dan Schell

I’m no expert on healthcare reform, but I doubt any of our readers would support a plan that directly retards innovation in the life sciences industry. But, since innovation takes money, I’ll bet you could argue that almost any plan that includes some form of fees or taxes for life sciences companies will hamper innovation either directly or indirectly. That’s a tough realization considering our industry already has a dearth of funding sources for up-and-coming biotechs and is rife with company closures. Take Orqis Medical Corp., for example. The company developed an innovative technique for increasing blood flow to help damaged hearts, but it failed to receive FDA approval. Consequently, its financial backers didn’t reinvest in the company, and now it is for sale.

While there are probably hundreds of stories like Orqis Medical’s, some new analyst reports are showing signs that the bleeding in this industry may be over — or at least stopped — for now. For instance, an investor perception study released by the Biotechnology Industry Organization (BIO) and Thomson Reuters indicated that more than 2/3 in the study expect greater M&A volume in 2009, and over 80% acknowledge that the credit crisis has forced them to change their investment approach, emphasizing that a company’s cash position is now more important than before. Furthermore, companies like Anthera Pharmaceuticals, Cumberland Pharma, and Talecris Biotherapeutics all launched IPOs in the last few months — a rare occurrence in the past few years. And finally, research firm VentureSource stated that in the second quarter of 2009, 595 companies (in all business sectors) raised $4.87 billion compared with 483 companies raising $4 billion in the first quarter. That’s not much of a change, but it is progress, and I think you’ll agree when I say, in this economy, we’ll take any improvement we can get.

While it’s true innovation and funding have a symbiotic relationship, often process and system changes must also occur for an innovative idea to flourish. In this issue, we have four articles that address process and system enhancements you can make regarding track and trace solutions (page 26), EDC (electronic data capture) applications (page 32), corporate and lab informatics (page 40), and pharmcovigilance (page 44). Hopefully the information in these articles can help your company streamline its operations in preparation for whatever challenges healthcare reform will create.