Assistant Managing Editor

VANCOUVER, British Columbia - In just a couple of weeks, the rest of the world will converge here for the 2010 Winter Olympics - the city already is closing off streets and putting the final touches on new construction - and the Westin Bayshore hotel on Coal Harbor will welcome members of the International Olympic Committee.

But this week, attendees of the BioPartnering North America conference get to see the city "all dressed up but without the crowds," as Moira Stilwell, Vancouver's minister of advanced education and labor market put it, as they schedule meetings with what could become future partners.

The Olympic schedule pushed up the annual conference, this year coming on the heels of J.P. Morgan, and conference goers evinced a similar sort of cautious optimism as they made their way to the opening session Monday morning, all hoping that 2010 will prove better than 2009 in terms of financings and deals.

The National Venture Capital Association recently reported that biotech investments declined 19 percent last year compared to 2008 - the fact that biotech was the largest investment sector was a silver lining - with $3.5 billion in venture capital raised in 406 deals.

Figures from BioWorld Insight put the year's total public and private fundraising at $17.6 billion, just barely enough to keep the industry going, according to Mike McCully, senior manager at Deloitte Recap LLC.

If the sector is unable to raise at least $17 billion per year, "we're in trouble," he said. "That's the target . . . what the biotech industry needs to keep the lights on."

But the increasing partnering dollars has helped. In the past five years, up-front payments have averaged a total of about $3 billion.

And while it looked like 2009 numbers might fall well below, the industry was saved by a surprise fourth-quarter surge in dealmaking - 75 deals at a total value of $15 billion, McCully said.

Of course, companies have to have cash to be attractive to partners, especially as big pharma and big biotechs look for more risk-sharing deals, a trend that is "of biotech's own making," McCully said. Firms have sought over the past decade to keep certain rights and participate in profit-sharing arrangements, so now those are part of the transaction model, he added.

Fortunately, some positive data can go a long way. Incyte Corp., for example, had been trading at a meager $2 per share at the start of 2009, with limited cash and overhanging debt. But the Wilmington, Del.-based firm reported a series of promising proof-of-concept trials for several programs, including JAK inhibitor, INCB18424, which helped it close a $540 million financing in September to boost cash and restructure debt, McCully said. (See BioWorld Today, Sept. 28, 2009.)

And in the fourth quarter, Incyte managed to close two deals - one with Novartis AG and one with Eli Lilly and Co. - picking up total cash payments of about $300 million. (See BioWorld Today, Nov. 30, 2009, and Dec. 22, 2009.)

Among big pharma firms, Novartis, of Basel, Switzerland, was particularly busy in the fourth quarter, signing seven deals, with a total value of $2.4 billion and total up-front payments of $434 million.

Only London-based GlaxoSmithKline plc was busier. It signed nine deals, with a total value of $2.8 billion, spending $164 million up front.

But there were some big players conspicuously absent in the latter half of 2009, meaning they could be on the lookout for in-licensing deals this year. Whitehouse Station, N.J.-based Merck & Co. Inc., for instance, is "looking at some major dealmaking in 2010," McCully said.

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