Xconomy continues its good series of articles spawned from Kevin Kinsella's comments that Big Pharma was becoming much more predatory in its behaviors within deals with biotechs. His basic point is that Big Pharma is destroying the VC investment ecosystem that really has supported the biotech industry over the years. Without that support, if Biotech VCs dry up - the capital to invest in "big projects" to attack the really tough diseases like cancers, neurodegenerative disorders, metabolic diseases, etc won't be there to take this to late stages.
Kinsella says that Antoine Papiernik's comments that this just reflects a weak point in history where pharma is in stronger financial position than biotech's and their VC backers misses the point. His contention is that this pharma behavior is unusual and is damaging the last of the VCs playing in the area. When these VCs are gone - and they can direct their money elsewhere whenever they want - then much new biotech development will also be gone or endangered. Then where will pharma get its new highly innovative products?
If Kinsella's contentions are correct, and you look at how pharma (Sanofi's CEO today said they want to direct more investment to biotech) is actively trying to move into the biotech arena with deal making -- and if too high a percentage of these deals are bad for the biotech investors -- then one does indeed have to wonder where will the products come from?
It is possible to kill this golden goose too. Under this scenario, Big Pharma's short term gain is also its long term loss.
Posted by Bruce Lehr April 12th 2011.