This year’s Biotechnology Innovation Organization's CEO and Investor Conference drove home the reality that many biotech companies have been wrestling with for some time: the stark disparity between the size of Big Pharma’s spending cash and the number of potential partnerships on the horizon means only the cream of the crop will rise to the top. Indeed, in a space where M&A has dropped off precipitously, IPOs are far and few in between, and private financing is tepid at best, biotechs are holding out hope for big-ticket licensing deals.
“I definitely get the sense that people need to find a way to return for their investors, to return their own costs probably out of their pockets. It's translating to perhaps maybe not typical business practices,” said Renee Williams, the head of external innovation for pharma leader Eli Lilly. “Having dollars doesn't mean that you run your experiments in a way that necessarily we want to see them.”
Williams’ proposal of data and strategy in exchange for commercialization rights and/or some amount of royalties indicates that the ball is so clearly in Big Pharma’s court so as to be a nonstarter for biotechs to punch up in an attempt to earn financing. Instead, their hard-won data must speak for itself and catch the attention of pharma backers. For instance, the U.S. subsidiary of Japanese biotech Oncolys BioPharma sorely needs a line of credit to follow through with its oncolytic virus therapy, suratadenoturev, boasting of promising clinical data and the potential for a revenue stream from Japan. Four years ago, upon the initial push from Oncolys, the data wasn’t there—and now that it is, the prospect of the company commercializing it by itself is a moonshot.