- Highlights of the 14th World Vaccine Congress – A Cell Culture PerspectivePosted 4 days ago
- Stem Cell Therapy Indications for Cardiovascular Disease in Phase II/III Clinical TrialsPosted 1 week ago
- Biologics Still on Top in Best Selling Drugs of 2013Posted 1 month ago
- Flexible Facilities for Biopharmaceutical ManufacturingPosted 1 month ago
- Learning more about your cells by employing flow cytometry and cell imaging platforms – How to troubleshoot challengesPosted 2 months ago
- Troubleshooting Media Development for BioprocessingPosted 2 months ago
- Choosing a Cell Culture Media Development Strategy for Biopharmaceutical ProductionPosted 2 months ago
- Paper or Plastic: A Study on Single-use and SustainabilityPosted 2 months ago
- 2013 FDA New Drug ApprovalsPosted 3 months ago
- The 15 Most Popular Blogs in 2013Posted 4 months ago
Is Medical Progress and Innovation in Jeopardy
A recent survey published by the National Venture Capital Association (NVCA) found that 40 percent of the 150 venture capital firms that responded have been investing less in life sciences over the past three years. The firms cite regulatory hurdles as a major reason for the reduction and plan to continue to reduce their spending over the next three years. The survey was highlighted in an article in Bloomberg Business Week titled, “Venture Firms Reduce Biotechnology Investment on FDA Risk.” In the article Terry McGuire, co-founder and general partner of Polaris Venture Partners is quoted saying that “The process has gotten to be so long, and the capital required so deep, that it’s becoming more and more difficult to generate venture-type returns and therefore make it worth your while to do it.” The article goes on to say that “venture firms have shifted their investments overseas,” where McGuire says regulatory approvals come quicker. More than one-third of survey respondents said they would increase their spending in Europe and 44 percent in Asia, compared with 13 percent saying the same for North America.
The issue first came to my attention because of a very interesting discussion by the Stem Cell Research Group on LinkedIn. The group had posted the article and members have been discussing the balance between risk and benefit, innovation and patient safety, and ultimately what the Food and Drug Administration’s (FDA) role should be in the approval process. The FDA has stated publicly that they are looking at industry concerns and Commissioner Margaret Hamburg said in a recent statement that the agency plans to streamline regulations and speed up the approval process for some drugs, among other changes. The Bloomberg article mentions “the agency (FDA) approved 25 new drugs as of Sept. 15 and at that pace, by year’s end, would clear the most new drugs in since 2004, according to Bloomberg data.”
This survey conducted by NVCA should be an eye opener, not just to those employed in the biotechnology or healthcare industries, but to anyone interested in the best, most innovative treatments for disease. Venture funds are moving overseas to countries where regulations are simpler. Everyone knows that new drugs, stem cell therapies, and medical devices are extremely expensive to research, develop, get approved, and commercialize. Without much-needed venture funds will we see a drop in innovation and progress in medical advancements in the United States (US); are we falling behind?
There are several examples of drugs being approved elsewhere before being approved by the FDA. One example was discussed in a blog on The Cell Culture Dish titled “What’s Next for Biosimilars?” Biosimilars are copies of approved biopharmaceuticals. In Europe, 14 biosimilars have already been approved; in the US the FDA still hasn’t even published guidelines regarding the pathway to getting a biosimilar approved. In another blog titled “Cell Culture Flu Vaccine Approved in Europe…Is the United States Next?” The Dish discusses Baxter’s approval of Preflucel in Europe. Preflucel is a cell culture-based influenza vaccine. Experts agree that cell-based vaccine production is faster, more reliable, and safer than egg-based production, but no cell culture-based influenza vaccine has been approved by the FDA. Interestingly, Preflucel was developed using a $1.3 billion dollar grant from the US Department of Health and Human Services, but was approved first in Europe. Now Takeda, a Japanese drug company, was given a grant by the Japanese government to utilize Baxter’s technology to produce a cell culture based influenza vaccine for approval in Japan. Baxter representatives have said that they are working with the FDA to receive approval, but why the delay?
In addition to being concerned as a healthcare consumer, I am also concerned about the economy. Medical innovation accounts for 50 percent of the growth of real gross domestic product (GDP) and is a major driver for America’s economy. According to the Biotechnology Industry Organization (BIO), in 2008 there were over 42,000 businesses and 1.3 million people employed in biotechnology in the US. Direct and indirect employment in the biosciences accounted for 7.5 million jobs. If venture money is heading overseas, doesn’t that mean jobs are too? Shouldn’t this be one of America’s number one job issues?
If so much depends on venture funding, then two questions immediately come to mind: 1) Which industries in the US are receiving venture capital and 2) Where will investment for new drugs come from (assuming venture money is not available for US biotechnology companies)?
Information technology (IT) accounts for more than half of all venture funding, followed by biotechnology and clean technology. Clean technology includes industries related to alternative energy, reducing pollution, recycling, etc. and is an expanding industry that may claim increasing amounts of venture capital. If venture funding continues to decrease for biotechnology, will large pharmaceutical companies fill the void? Several of the most successful pharmaceutical companies already have venture funds for investing in start-up biotechnology companies. Pfizer started Pfizer Venture Investments in 2004 and have an annual investment budget of 50 million dollars. In 2009, Merck launched Merck Serono Ventures with a 55 million dollar budget and most recently Boehringer Ingelheim launched a global venture fund with 100 million euros to spend in 2010. This is not a new idea, GlaxoSmithKline has had a fund since 1985 with over 560 million dollars in investment, Novartis claims to be the largest with 650 million dollars invested, and Roche has a portfolio of 25 biotechnology firms.
There are many questions about the future of medical innovation in the US, but some things appear clear from this new survey: venture capital in biotechnology is going down; FDA regulations need to be critically reviewed and complaints rigorously addressed; and something needs to be done before medical progress and economically critical biotechnology jobs end up being shipped overseas.
Please share your comments with us; we welcome your feedback.
For further reading:
- Bloomberg Businessweek Article – Venture Firms Reduce Biotechnology Investment on FDA Risk
- LinkedIn Discussion in Stem Cell Therapy Group
- Food and Drug Administration Press Release, October 5, 2011
- Biotechnology Industry Organization – State Legislative Best Practices in Support of Bioscience Industry Development
- Inc. – Where VCs are Putting Their Money in 2010
- Chemical and Engineering News – Germany’s Merck Launches Venture Fund