CAMBRIDGE, Mass. - OBR-Boston is the 10th OBR chapter to be founded in the three years of OBR’s existence, and as expected for the world’s leading center of biotech innovation, the May 13th launch event was a resounding success! The Biotech Boom – What We Can Learn From a Banner Year was attended by record-breaking numbers of academics and industry professionals in Harvard’s Armenise Amphitheater and was also broadcasted to Georgia Tech and the University of Illinois, Urbana-Champaign.
Peter Abair, Director of Economic Development and Global Affairs at MassBio, kicked off the evening with a glowing review of the biotechnology landscape in Boston. MA truly represents everything that went well in the biotech industry last year. BioPharma employment in MA has grown by 40% over the past decade, and more jobs are being created every day. When factoring in company density and strength, MA has almost twice the concentration of jobs as the next closest state in the U.S. This is best exemplified in East Cambridge/Kendall Square, where 120 companies are clustered in only three square miles.
It is not just in large companies that MA is a global leader, but also in start-ups. Massachusetts accounts for a third of seed stage funding in the U.S. over the past five years, and also received 20% of all U.S. biotech venture capital last year. Johnson and Johnson, one of OBR’s global partners, has launched a new innovation hub in Boston. Furthermore, OBR’s inaugural OneStart Americas entrepreneurship competition, sponsored by SR One and J&J, was won by Resilience Pharmaceuticals, founded out of MIT.
Despite all of these achievements, Abair cautioned that the best of times could easily become the worst of times. A recent example is the mini-computer industry, where Massachusetts controlled more than 2/3 of the market in the 70’s and 80’s. However, the industry collapsed shortly thereafter and gave way to the now ubiquitous PC. Abair quoted Vicki Sato, a professor at Harvard Business School, “The greatest threat to the Massachusetts life sciences cluster is a diminished reward for innovation. If healthcare reform undermines that incentive, this entire cluster could disappear overnight.” Specifically, Abair highlighted cost containment as a major concern in the industry, and closed his introduction with a call to drive innovation to help human lives.
Abair then joined the panel discussion, led by John Carroll, editor of Fierce Biotech and editor-in-chief of the life sciences group. The other panelists were Dr. Robert Langer, Koch Institute professor at MIT, Dr. David Meeker, CEO of Genzyme, and Dr. Greg Verdine, professor at Harvard and Founder and CEO of Warp Drive Bio. Dr. Langer was a pioneer in angiogenesis inhibitors and controlled release polymers and has started over 28 companies while at MIT. Dr. Meeker came to Genzyme and developed their cystic fibrosis gene therapy program, bringing together both patient advocacy groups and academics. Dr. Verdine is no stranger to entrepreneurship either, starting Enanta Pharmaceuticals in addition to Warp Drive Bio. Dr. Verdine is also a member of Third Rock Ventures, funding unconventional, next-generation therapies.
Keeping the focus on innovation, John Carroll opened by asking the panelists for their opinions on the current state of biomedical innovation. Dr. Langer was bullish on innovation, pointing out areas such as nanotechnology, RNA therapeutics, tissue engineering, and regenerative medicine as potential game-changers. Dr. Verdine added that the challenge for any next-generation technology is to look for the potential opportunities and “shovel ready projects” to reduce risk and validate the technology. He also highlighted the need for patience, noting that technical advances has allowed gene therapy to come raging back even though it had been written off just a couple of years ago. He said, “Science is inexorable, science keeps going and innovating…don’t write off areas because the field can reinvent itself.” From an investment perspective, Dr. Meeker said that for any innovative technology, the key is to identify the problem you’re trying to solve, what the chance is that the technology can solve it, and whether or not it is testable.
Carroll then asked the panelists what new business models they were seeing to foster innovation and interactive research. Dr. Meeker noted that the old pharma model of “Give someone a billion dollars and they’ll find a drug” has failed repeatedly, and that there has been a greater acceptance and need for insourcing during the drug development process. This means that fostering relationships is crucial in order to be successful. Dr. Verdine explained Third Rock Ventures’ novel model of funding, where start-ups are given funds to last a few years in order to allow them to execute their science plan. He pointed out that the value proposition of any company comes from the science, and the CEO needs to be able to carry out the science and not just raise money. Peter Abair commented that the unique environment of Massachusetts has become a breeding ground for these hybrid leaders who understand both the science and the business aspect of biotechnology. Dr. Langer acknowledged that business models are changing depending on what stage of development new technologies are in, but asserted that the keys to innovation and success are to have “great people, great patents, and great technology.”
The discussion ended with the big question on everybody’s mind: money. To put the funding landscape in perspective, Carroll harkened back to the 2008 financial crisis when there were no biotech IPOs and investors were unwilling to take on risk. He asked the panelists where they see future funding coming from, and whether it will dry up again. Dr. Langer’s firmly stated that if you have a good idea and work hard enough, you’ll find a way to fund things. That being said, he acknowledged having to look for funding from unusual places, including foreign governments, foundations, and government grants. Peter Abair pointed out that changes are being seen not in the amount of funding, but where the funding is coming from. Specifically, he observed that most funding for early stage activities is now coming from the corporate world (industry alliances account for $17 billion compared to $4 billion from venture capital), and disease foundations are also playing an increasing role in funding. Abair also highlighted the increased competitiveness for funding, requiring companies to not only have the best ideas and the best people, but to also have top notch business and scientific advisory boards.
As someone with a foot in both academia and industry, Dr. Verdine addressed the recent reductions in NIH funding. Acknowledging that there will be a continued period of austerity, he suggested that increased collaboration with pharmaceutical companies may help bridge this gap. For entrepreneurs, his advice was to be able to explain your science succinctly and in a way that gets to the impact of the research. He pointed out that there is a huge demand for innovation in biotech, and for academics to be prepared to be part of an interactive team when entering into sponsored research agreements.
Wrapping up the event, all of the panelists expressed optimism about the future. Dr. Meeker’s opinion is that there is no better time to be in the industry, and Dr. Langer echoed these thoughts and emphasized the need to be adaptable in today’s environment. John Carroll closed with the observation that one of the fundamental drivers of the industry is that large pharma companies have not mastered the art of innovation, and therefore they partner with smaller and more focused companies that excel at this. “This is a great time to be in biotechnology. If you really understand what you’re doing and you know how to get there, and you’ve got a clear plan on what this is all about, there are more opportunities now for drug developers now than I’ve seen in the short 11 years I’ve covered this industry. I think the future is very bright.”