Need to Create Value
For IPO follow-on success, there must be a flow of results and product launches to create value in the minds of investors. VCs should be cut loose as early as possible, and companies must turn to those with deeper pockets for support. In short, all stakeholders must do more. Pharma should continue doing deals and give direction to biotech, VCs could be less risk averse and should manage companies’ cash-burn rates, CEOs ought to think more globally, and institutional investors should invest only in quality IPOs.
However, there are some signs of improvement in Europe. The IPO market is picking up, with Wilex(www.wilex.com), Santhera (www.santhera.com), and Newron(www.newron.com) going public and follow-on offerings from NicOx(www.nicox.com) and CeNes(www.cenes.com)Entelos(www.entelos.com) and Bodisen(www.bodisen.com) show the increasing success of the Alternative Investment Market (AIM), which is the London Stock Exchange’s (LSE) international market for smaller growing companies. In addition, pharma-biotech collaborations seem to be on the increase. “All of these are signs that companies may not need to sell to the U.S.,” said Dr. Evans.
U.K. biotechs looking to grow to critical mass and maintain their independence might look to the example of Amgen (www.amgen.com), which recently celebrated its 25th anniversary. Out of 1,800 U.S. biotechs that have been created since 1980, Amgen is one of only six that made more money than it spent, according to Jeremy Haigh, Ph.D., head of European R&D at the company.
Amgen started out with two successful products, EPO® and Neupogen®, but refocused on its pipeline in 2000 and has since had a steady stream of product approvals such as Enbrel®. “Recruitment and retainment of world class scientists and significant R&D are critical to Amgen’s success,” noted Dr. Haigh. “We are now expanding internationally into Latin America, India, and China.”
Part of Amgen’s philosophy is a true focus upon serious illness. “It may sound obvious, but companies often get distracted from this,” according to Dr. Haigh. The company also believes in independence of modality, so, although it is best known for protein therapeutics, it will consider nucleic acids, small molecules, or peptides.
“What is important to us is hitting the target—we don’t mind how we do it,” Dr. Haigh explained.
Finally, as Amgen has grown—to 20,000 staff worldwide and a market cap of $80 billion—they have taken the risks of success on board through their organizational culture, central to which is retaining the spirit and values of a smaller company.
Amgen has made the transition from a narrow focus company to a more broad-based one. Could this have happened in the U.K. or Europe, and can this happen now? Amgen may have had some luck, unique circumstances, and the U.S. environment.
“The U.K. does have the science and they are starting to get the environment right. Although no one can predict another Amgen, we should try to create the environment for a similar success,” concluded Dr. Haigh.