by Gary D. Novack, Ph.D. | PharmaLogic Development, Inc.
The JPMorgan biomedical conference met at the Westin St. Francis in San Francisco the week of 12 January. The opening event of the funding year, this conference serves as a bellwether of funding for biomedical firms for 2009. Note that “bio-tech” is actually a subset of these firms, which include traditional mid-size pharmaceutical firms, start-up pharmaceutical (“small molecule”) firms, medical devices, and yes, the bio-technology firms developing large molecules (e.g. proteins.) Even without name tags and the registration canvas totes, it’s easy to spot these “masters of the Universe” (thank you Tom Wolfe.) They are mostly Caucasian men dressed in suits, heads bowed in reading their Blackberry screens as they walk around Union Square with a paper coffee cup clad in its corrugated protector and plastic top.
Atavistic attendees still call it the “H&Q”, after Hambrecht & Quist who was the sponsor of these meetings many mergers ago. It’s a dating game, where these biomedical firm executives meet with the PWM’s (“people with money” – thank you Tom Abate of the Chronicle). It’s pretty clear that many of these meetings are first dates. Look in any Union Square hotel lobby or coffee house (rhymes with “Carstruck’s,”) and you will see a person circling, looking at everyone else, sometimes asking “Are you Frank?”. You know that the briefcase they carry has a laptop with a 20-slide PowerPoint presentation of their technology and their anticipated market size which can only be expressed in scientific notation.
How many of these first dates result in betrothals and weddings? Hard to tell. Most of the people I talked with were doing the dates, but with little hope of seeing funding in the near future. We’re not even sure how to value today’s technology in a market that struggles to move after the plummeting 4th quarter. How do you value a new technology that will take years to develop? Look for press releases over the next few months – but it’s unlikely we will see many big deals or IPOs in this sector. Remember, the FDA does not develop drugs and medical devices for the health of the U.S. population – they only regulate what the private sector does. And this private sector, biomedical development has an insatiable need for capital.
