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Biotech Investors, Emerging Companies Bullish On 2014

February 10, 2014
The 16th BIO CEO & Investor Conference is off to a great start. This event has truly grown into a must attend for emerging companies and investors. This year, we have more than 1,300 participants, including more than 850 investors. In addition, we have helped to set up more than 1,700 partnering meetings for participants over the course of the conference. Our world-class partnering system, and the opportunity to hear from key industry leaders, is really what sets this conference apart.

Since its inception, the BIO CEO & Investor Conference has helped to facilitate more than 13,000 partnering meetings, which have led to thousands of new partnerships, investments, and opportunities for emerging companies across our industry.

The general mood here is that our industry is well-positioned to build on an extremely successful 2013, a year which saw record IPOs, important new approvals, and a biotech market that greatly outpaced the S&P 500.

So what does 2014 hold for our industry?

Personally, I have never been more bullish on the future of biotechnology because of the rapid pace of scientific discovery, strong investor interest and the entrepreneurial drive I see every day at emerging companies across the globe.

But the reality is that for our industry to realize its full promise, we need the right public policy environment. Key issues like reimbursement, FDA funding and flexibility, strong IP protections will continue to play a critical role in the long-term success of biotechnology companies and our ability to bring new drugs to patients.

These are the issues we work on every day at BIO. In recent years, the environment in Washington has been challenging. We have seen gridlock, partisanship, a government shutdown and sequestration. This meant playing strong defense and protecting our industry from harmful, shortsighted cuts to key programs. And we did that well.

But we also managed to put some good wins on the board, including efforts that have helped to reform the FDA, a major victory in the Affordable Care Act with regard to 12 years of data exclusivity for innovative biologics; long-term reauthorization of the SBIR program; and the JOBS Act.

And the bipartisan budget deal at the end of last year, and the recent omnibus appropriations bill, gives us reason for optimism going forward.

These policies have helped to boost investor confidence in the regulatory environment. This was evident in a survey of more than 200 leading buy-side investors that we conducted during the week of January 23rd.

Complete results can be found here, but below are some of the highlights we discussed today at the conference:

  • For starters, investors see ample room for growth in the biotech sector in 2014. More than 56 percent of respondents see double digit returns once again for major biotech indices in 2014.

  • Nearly half of respondents said an increase in positive clinical trials and scientific breakthroughs will be the most important catalyst for that growth.

  • Forty-three percent of respondents said that changes to accepted efficacy or safety endpoints by FDA and tighter reimbursement requirements will have the greatest impact on their investment strategies going forward. Thirty-two percent cited tighter reimbursement strategies by private insurers; and about 17 percent cited tighter government reimbursement policies.

  • Approximately 75 percent of respondents said FDA decision making has become more balanced with respect to risk/benefit analysis in recent years, with over 13 percent saying there has been a major shift. This was a major concern for our member companies just a few years ago---and it has been a BIO priority.

  • In addition, more than 75 percent of respondents said that regulatory change contributed to increased investment in recent years, with over 12 percent saying that it has had a significant impact.

  • Overall, investors are overwhelmingly bullish on the oncology space, with 48 percent of respondents saying it offered some of the best investment opportunities. Of particular interest was the exciting field of Immuno-Oncology, following a lot of data on PD-1 inhibitors that reported out last year.

Today, there are more than 900 new biologics in development for conditions that target more than 100 diseases.

These innovations are built on a foundation of brilliant scientific discoveries, fueled by driven entrepreneurs and allowed to flourish because of the risk taking of private investment and venture capitalists. The goal now is to build on this momentum. And that is our focus every day at BIO.