SOBERING BIO
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7 WWW.CEN-ONLINE.ORG MAY 25, 2009 T HE PAST YEAR has been tough for biotech companies, and the Biotechnology Industry Organization’s annual meeting, held last week in Atlanta, reflected the challenging times. Attendance was down by 30 to 40% from the 20,000-plus people who flocked to San Diego for last year’s event. One of the surest signs that the turnout made for a more sub- dued event was the shorter lines at Starbucks than in previous years, several conference-goers pointed out. The biotech industry finds itself caught in “the per- fect storm of economic meltdown, political volatility, and scientific challenge,” James C. Greenwood, CEO of the trade association, told conference attendees. In the wake of the credit crunch, venture capital money has shifted to steadier markets, and biotech firms are having trouble raising capital. According to BIO, 180 companies, or 45% of all publicly traded biotech firms, have less than a year of cash left on their balance sheets. As a result, at least 25 public companies have delayed or cut research programs since the begin- ning of the year, by BIO’s count. And in the past year and a half, some 125 biotech companies have laid off nearly 10,000 employees. Biotech firms have been particularly affected by the new risk-averse investing environment, explained Glen Giovannetti, global biotechnology leader at consulting firm Ernst & Young. Biotech has always been a gamble, he noted, but venture capitalists are now worried that they will no longer have a clear exit strategy on an investment. Indeed, there hasn’t been a single initial public offering of stock this year, and only one biotech firm went public in 2008, according to BIO. Although the late-stage new-drug pipeline does not look substantially different overall after the cutbacks, many people at the confer- ence were concerned about what the economic fallout may mean for the industry’s ability to support new sci- ence. “The real fear is that the guy with the innovative idea isn’t going to find the money to support it or get the visibility to attract big pharma,” noted Michael D. Ko- wolenko, senior vice president of Wyeth’s biotech unit. The industry won’t feel the impact of the gap in financ- ing until five or more years from now, he added. There is an upside to the financing crunch for deep- pocketed big pharma and biotech players hoping to fill their pipelines or add new technology: Assets can be picked up on the cheap. As Giovannetti observed, the partnering sessions were easily the most active area of the BIO conference. But although big companies are clearly on the look- out for favorable deals, some caution against buying drug candidates or businesses that aren’t the best fit. “Just because there’s a sale going on, it doesn’t mean you have to buy the sweater,” Amgen Chief Medical Of- ficer Sean Harper said.—LISA JARVIS Two new reports weigh in on the climate of early Mars. One concludes that the ear- ly planet was warm, the other that it was cold, but both suggest the planet was wet. An international team of scientists led by Cornell University’s Stephen W. Squyres reports that during two years of exploration, NASA’s Mars rover Op- portunity found that compositional features, apparently altered by liquid water in the ex- posed walls of Mars’s Victoria impact crater, match those of two other impact craters— Eagle and Endurance— several miles away. This suggests, the researchers say, that the same groundwater processes affected large regions of terrain on a warm planet (Science 2009, 324, 1058). For example, the craters all show, among other things, sulfate salts, which likely were produced by the interaction of basalt with acidic water. In the second report, NASA Ames Research Center astrobiologist Christopher P. McKay and colleagues take aim at recent work that suggests Mars has always been too frigid to support liquid water (C&EN, Dec. 1, 2008, page 59). Us- ing chemical composition data gathered at various Mars landing sites, the group found that a collection of dissolved species, including silicon, iron, sulfur, calcium, and aluminum, could suppress the temperature at which water freezes to below 273 K, thereby allowing liquid water to exist on the early planet (Nature 2009, 459, 401). A model McKay’s group developed indicates that minerals that would be formed from those dissolved species after millennia of weathering processes match minerals actually found on Mars, adding further credence to the idea that liquid water was present on the frigid young planet.—ELIZABETH WILSON MARS RESEARCH Two new studies heap on yet more data indicating that Mars was once wet NEWS OF THE WEEK SOBERING BIO CONFERENCE: The financial crisis meant fewer attendees at the biotech industry’s annual meeting BIO 2009 was big, but not as big as in recent years. LISA JARVIS/C&EN STRATIFIED False color image of Cape St. Vincent at Victoria Crater, on Mars, shows sedimentary layers like those in other craters in the region. COURTESY OF STEPHEN SQUYRES
Transcript of SOBERING BIO
7WWW.CEN-ONLINE.ORG MAY 25, 2009
T HE PAST YEAR has been tough for biotech companies, and the Biotechnology Industry Organization’s annual meeting, held last week
in Atlanta, reflected the challenging times. Attendance was down by 30 to 40% from the 20,000-plus people who flocked to San Diego for last year’s event. One of the surest signs that the turnout made for a more sub-dued event was the shorter lines at Starbucks than in previous years, several conference-goers pointed out.
The biotech industry finds itself caught in “the per-fect storm of economic meltdown, political volatility, and scientific challenge,” James C. Greenwood, CEO of the trade association, told conference attendees.
In the wake of the credit crunch, venture capital money has shifted to steadier markets, and biotech firms are having trouble raising capital. According to BIO, 180 companies, or 45% of all publicly traded biotech firms, have less than a year of cash left on their balance sheets. As a result, at least 25 public companies have delayed or cut research programs since the begin-ning of the year, by BIO’s count. And in the past year and a half, some 125 biotech companies have laid off nearly 10,000 employees.
Biotech firms have been particularly affected by the new risk-averse investing environment, explained Glen Giovannetti, global biotechnology leader at consulting
firm Ernst & Young. Biotech has always been a gamble, he noted, but venture capitalists are now worried that they will no longer have a clear exit strategy on an investment. Indeed, there hasn’t been a single initial public offering of stock this year, and only one biotech firm went public in 2008, according to BIO.
Although the late-stage new-drug pipeline does not look substantially different overall after the cutbacks, many people at the confer-ence were concerned about what the economic fallout may mean for the industry’s ability to support new sci-ence. “The real fear is that the guy with the innovative idea isn’t going to find the money to support it or get the visibility to attract big pharma,” noted Michael D. Ko-wolenko, senior vice president of Wyeth’s biotech unit. The industry won’t feel the impact of the gap in financ-ing until five or more years from now, he added.
There is an upside to the financing crunch for deep-pocketed big pharma and biotech players hoping to fill their pipelines or add new technology: Assets can be picked up on the cheap. As Giovannetti observed, the partnering sessions were easily the most active area of the BIO conference.
But although big companies are clearly on the look-out for favorable deals, some caution against buying drug candidates or businesses that aren’t the best fit. “Just because there’s a sale going on, it doesn’t mean you have to buy the sweater,” Amgen Chief Medical Of-ficer Sean Harper said.—LISA JARVIS
Two new reports weigh in on the climate of early Mars. One concludes that the ear-ly planet was warm, the other that it was cold, but both suggest the planet was wet.
An international team of scientists led by Cornell University’s Stephen W. Squyres reports that during two years of exploration, NASA’s Mars rover Op-portunity found that compositional features, apparently altered by liquid water in the ex-posed walls of Mars’s Victoria impact crater, match those of two other impact craters—Eagle and Endurance—several miles away. This
suggests, the researchers say, that the same groundwater processes affected large regions of terrain on a warm planet (Science 2009, 324, 1058). For example, the craters all show, among other things,
sulfate salts, which likely were produced by the interaction of basalt with acidic water.
In the second report, NASA Ames Research Center astrobiologist Christopher P. McKay and colleagues take aim
at recent work that suggests Mars has always been too frigid to support liquid water (C&EN, Dec. 1, 2008, page 59). Us-ing chemical composition data gathered at various Mars landing sites, the group found that a collection of dissolved species, including silicon, iron, sulfur, calcium, and aluminum, could suppress the temperature at which water freezes to below 273 K, thereby allowing liquid water to exist on the early planet (Nature 2009, 459, 401).
A model McKay’s group developed indicates that minerals that would be formed from those dissolved species after millennia of weathering processes match minerals actually found on Mars, adding further credence to the idea that liquid water was present on the frigid young planet.—ELIZABETH WILSON
MARS RESEARCH Two new studies heap on yet more data indicating that Mars was once wet
NEWS OF THE WEEK
SOBERING BIOCONFERENCE: The financial crisis
meant fewer attendees at the biotech industry’s annual meeting
BIO 2009 was big, but not as big as in recent years.
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STRATIFIED False color image of Cape St. Vincent at Victoria Crater, on Mars, shows sedimentary layers like those in other craters in the region.
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