Cost-effective drug discovery after the financial crisis

By Peter Malloy

Drug discovery in most cases involves a chemistry pathway from target to hit to lead, and then, with a bunch of pre-clinical luck, onto the pre-IND candidate drug or CD. As competition between pharma companies for pipeline deals heats up—due to their infamous $65B (depending on whose numbers you use) patent cliff over the next few years—deals are getting done earlier and earlier. No longer is Phase II the all-important pay-day we once believed. Now deals are being done at the pre-IND stage and the value of some of those deals is outstripping Phase I and even some Phase II deals. So the ‘pharma deal’ as the primary value-proving inflection point is closer than ever, and getting to a high-quality CD is more important than ever.

Against this, we have a financial crisis that has seen drug discovery funding by VCs dry up or get hellishly expensive, as those who have endured recent 50% down rounds will attest. Anecdotally, the crisis has hit Californian biotechs harder than most, with many just recovering from the VC drought of 02-04. As CEOs have shrunk budgets to survive, one of the casualties has been the closure or scaling back of many drug discovery chemistry programs. Now, as companies start to look forward to value creation rather than just survival, the successful company model is evolving to something more virtual. As one VC observed at a recent conference, the old model of licensing some technology, hiring a team, leasing a facility, and raising successive rounds of funding is dead. Now, you need to take what was a fixed cost and make it variable.One of these formerly fixed costs is drug discovery chemistry—the target-hit-lead synthetic and medicinal chemistry that was previously seen by many as a ‘core’ competency—and those that weren’t already outsourcing it, are now compelled to consider it.

RoseRyan Roadmap Series Article 3 of 4:

A ROADMAP FOR GROWTH: Right Resources, Right Systems, Right Time

By Kathy Ryan

The right talent at the right time is critical to any company’s success. The hitch is, emerging companies do not have unlimited resources—i.e., cash (especially in this economy)—to hire the ideal team of full-time employees. That’s particularly true when those employees handle tasks that aren’t core to the business.

This is why service providers and outside consultants are an important resource for start-ups climbing the ladder to becoming an established company. They have the expertise you need, they can establish best practices that should be embedded early on, and they’re cost-effective—you can sip, not guzzle, as you draw upon their expertise and you can call on them only when needed.

BayBio to Announce 2010 Agenda at JP Morgan

No where else in the world do three fundamental factors of a cluster converge as they do in California – VC investment, a world-class education system and an unparalleled entrepreneur ecosystem. Yet in 2009, VC investment was down and state funding for higher education was slashed

BayBio: IMPACT 2010, the preeminent report on the state of California’s life sciences industry, outlines several steps the State and Federal government can undertake to increase capital flow and improve funding for education. As in years’ past, BayBio: IMPACT will be launched in San Francisco during JP Morgan with some of California’s leading executives to announce the vital steps to preserve California’s leadership in the life sciences industry.

By: Gail Maderis

• 3-V Biosciences, Inc.
• LakePharma, Inc.
• Lin-Zhi International Inc.
• M Squared Consulting,Inc.
• Oligasis, LLC
• Tempsys, Inc. dba CheckPoint Wireless