I commented on this story last week when it appeared in Xconomy-San Diego.
I will stick with my gut reaction. This is a fairly rational and expected response by Big Pharma companies suffering through their own trials and tibulations caused by expiring dugs patents and pipeline failures, i.e. they are laying off risk until a project looks more like a "sure thing" - though there never is such a thing.
I will take Kinsella at his word that the environment is getting even tougher out there and it is likely that this will reduce the amount of VC activity (also a rational response) and make biotech more dependent on more one-sided Big Pharma deals. This implies Big Pharma as the new investment banks -- and also acting as the new Sheriff in town.
The only alternative might be more government investment in the area if they want to bolster the R&D efforts outside dependency on Big Pharma dollars. Extension of R&D tax credits and grants anyone?
Posted by Bruce Lehr Feb 25th 2011.