"Biotech firms feel funding squeeze" by Robert Weisman, Globe Staff | October 2, 2009
Life-sciences companies face a funding squeeze as pharmaceutical giants consolidate and financial markets cool toward biotechnology start-ups, industry leaders said yesterday.
“The biotechnology industry is a huge consumer of capital,’’ Peter Wirth, executive vice president at Genzyme Corp., the giant Cambridge biotechnology company, told a leadership panel at Suffolk Law School. “It takes a billion dollars to develop a drug. The critical dilemma now is how are we going to continue to pay for innovation.’’
And MOST FAIL to ever make a PROFIT, folks! All that $$$ wasted!
In the past, drug development was funded by venture capital firms and other private investors in biotech and medical technology start-ups, but such backers have become discouraged....
Also because your pensions are gone, America.
Related: VenCap Vroom-Vroom
At the same time, big pharmaceutical companies, which contributed funding through alliances with biotechs, have been acquiring one another, effectively shrinking the financing pool.
Related: The Therapeutic Rip-Off
The result is fewer bidders and joint venture partners for small and mid-size biotechs, said Steven C. Gilman, chief scientific officer at Cubist Pharmaceuticals in Lexington....
Susan R. Windham-Bannister, chief executive of the Massachusetts Life Sciences Center, in Waltham, said the center, created through the Patrick administration’s $1 billion life-sciences initiative, has helped to fill the funding gap through working capital loans, tax incentives, and strategic investments in start-ups.
Yup, and it will only cost you a billion-eight, taxpayers, what with the interest paid to the banks for borrowing the money.
“This is an area where there are jobs,’’ she said. “And I really believe the way to get out of the current recession is by creating jobs.’’
And it won't be in biotech -- not nearly enough. Then again, I'm reading a self-serving, agenda-pushing newspapers, so.... (filed).
But state money can go only so far. Wirth said more companies may have to adopt a “marathon model’’ of bringing drugs to market on their own.
WHY AREN'T THEY ANYWAY?
The previous “relay model’’ of conducting research and development and then selling it may now be broken, he said. “That model worked well until a couple of years ago, when the guy who was supposed to take the baton wasn’t there,’’ Wirth said.
Translation: The TAXPAYER and AVERAGE American has been TAPPED OUT and can no longer foot the bill.
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