Biopharmaceutical notes from San Francisco
On June 15th 2006 BAY Bio held its 2006 meeting entitled, Accelerating Global Leadership. Stuart Wren writes on some of the more important sessions, with further reports in future editions.
This meeting gave the Northern Californian biopharmaceutical community an opportunity to hear reviews and panel discussion in five parallel sessions entitled "Money", "People", "Communications and policy", "Regulatory and IP" and "Globalization".
We begin with the Plenary address by Fred Frank, Vice Chairman and Director, Lehman Brothers.
Mr. Frank with his impressive experience provided a clear insight into the activities of and prospects for the major pharmaceutical companies and focused on the importance of creating competitive advantages, leading to a return to sustainable high growth for the industry.
According to Mr. Frank, the more enlightened companies and those most likely to enjoy success in the future are focused on improving the efficiency of their R&D and the creation of other competitive advantages which will lead them back to sustainable high growth. For example, GSK's Centres of Excellence in Drug Discovery seem to him to be working and he believes that initiatives such as this will better equip companies to be successful in the current business environment. Several such companies were said to be in the regrouping or getting ready phase and are expected to return to high growth by 2009.
He spoke on the realisation by many of the large companies that internal resources are insufficient to fuel their product pipelines. Consequently, he argues, big pharma is increasingly dependent on biotech companies (which hold about 67% of new molecules) and, due to competition deals are being done at an earlier stage of drug development. The Boston Consulting Group has reviewed the importance of licensing for fuelling growth and concludes that pharma needs to prepare for this already competitive area to become significantly more so in the near future.
Some good news is that with improved nutrition and healthcare, life expectancy continues to increase as does the incidence of diseases of the elderly, some of which, such as certain cancers were minor diseases in the past. This requires careful monitoring as it is likely to provide attractive new product opportunities.
Mr. Frank concluded that continuation of corporate growth is the major objective for most CEOs, yet many companies are organised to maintain the status quo. This must change and a most important requirement is ensuring competitiveness in acquiring and retaining the most important assets, which are technology, products and key people.
Please contact Wren International if you have any questions or would like to discuss the issues raised here.