Pharma is always concerned about the long-term stability of a biotech partner, especially since many companies have a runway of less than one year. Dr. Zabrowski said that early-stage deals on the risk-sharing model were evolving, though his company has yet to announce one. “It is important to come to the table earlier in the race for first-in-class,” he observed. There are implications for both pharma and biotech on how these new relationships should be managed.
Although Dr. Pollard-Knight observed that “the amount of money available has increased a little but is not the same as before,” Morris said she expected small companies not to be able to take products through to a later stage. They must select which ones to work on and add value. Phase III and commercialization is not an option for many companies unless the capital markets change dramatically.
According to Björklund, R&D with big pharma is also undergoing significant changes because of restructuring and decreased finance. This will impact biotech, he said with certainty. “If I were in biotech I would think about how it was affecting my company and how I could be a part of it, how to fit in.” Dr. Zabrowski agreed, given that R&D spending is proportional to sales and many patents are about to expire. “There will be harder choices made, and sooner,” he predicted. “We need to create a more entrepreneurial spirit that does not keep biotech out, but makes them a more equal player.”