Uphill climb for biotech companies seeking investment
February 10, 2009 – 10:37 am by Steven Niles
In a recent op-ed in The Seattle Times, James Bianco, M.D., CEO of Cell Therapeutics Inc., talks about how his company was able to raise $117 million in 2008 through innovative, but dilutive, financing, despite public-company financing being down 58% from 2007. According to Dr. Bianco, the worst mistake a biotech CEO can make in this economy is to focus solely on the company’s daily stock price, and not look to build long-term shareholder value.
“I have always followed a single principle – walk by faith, not by sight – to guide me and CTI, through both good and tough times,” Dr. Bianco writes. “Those companies with lasting vision and/or noble missions, whether they be Starbucks or Nordstrom, even when they stray, find their way back to enduring success.”
Our February issue of Med Ad News will be hitting desks soon, and in our continuing coverage of our chaotic economy, Senior Editor Joshua Slatko offers up a feature on the new challenges the biotechnology industry faces in drumming up investment. Josh notes that with investors running hard from risk, the traditional high-risk, high-reward profile of most biotech companies is becoming harder to sell. Almost half of public biotechnology companies have less than a year’s worth of cash on hand. As a result, executives have to make tough choices about how to find capital, what projects to focus on, and which employees to keep.
Josh spoke to a number of industry experts, including Ellen Dadisman, managing director, communications, BIO; Diane Romza-Kutz, the chair of the life sciences practice group for Neal Gerber Eisenberg LLP; Richard Blaylock, a biotech partner at the law firm Pillsbury Winthrop Shaw Pittman; David Collier, a managing director of CMEA Capital, a venture capital company that focuses on life sciences; Rick Williams, chief business officer for the Hamner Institutes for Health Sciences; Ken Aldrich, CEO, International Stem Cell Corp.; John Collar, executive director of the Colorado BioScience Association; and Brent Ahrens, a general partner at Canaan Partners, another venture capital company with a focus on healthcare.
The article concludes on somewhat of a positive note. With large pharmaceutical companies looking to stock their pipelines as a result of the downturn, biotech companies have more partnership opportunities with big pharma than ever before.
Tags: biotechnology, business, Economy, investment
