NEW YORK - The FDA's leader is getting shifted to another federal agency. The Biotechnology Industry Organization's president is retiring this summer. And the atmosphere in the public markets is "a lot more hostile than it was four or five years ago," an industry lawyer said.
Still, the BIO CEO & Investor Conference here proved upbeat, said BIO's president Carl Feldbaum. He noted "a mixture of confidence or optimism, combined with curiosity" on the part of would-be investors in the sector.
"The mood does differ from year to year," he said. "In 2001-2002, [attendees] were a little battered. Last year, they were sort of sitting up and taking nourishment. This year, there are signs of real buoyancy. People feel good." The conference chalked up a record 2,200-plus registrants.
Feldbaum, 60, disclosed earlier this month his plan to retire. Last week, rumors were confirmed about President Bush's plan to transfer FDA Commissioner Mark McClellan to the leadership of the Centers for Medicare and Medicaid Services. (See BioWorld Today, Feb. 3, 2004, and Feb. 23, 2004.)
"McClellan is such a star that it's not surprising the president would move him around on the chessboard to fill what's perceived as the greatest need," Feldbaum said, adding that many in the industry now fear the FDA slowdown experienced in the 18 months before McClellan was appointed.
"We'll be watching that closely," Feldbaum said. The hope is that the systems and personnel put in place by McClellan, who took the job in 2002, will "continue to drive the reviewers to be less risk-averse and to make decisions. Bureaucracy tends to settle."
BIO will be putting in its two cents. Or three.
"I want to be very delicate in how I put this, but I think it's important for the industry over the course of 2004 through the election - whether we are dealing with a Republican or Democratic administration beginning next January - to have a pretty good list in our minds of who would be excellent to fill that role - not that we'd get our way," Feldbaum said. "On the other hand, I do not believe a mere suggestion on our part would be the kiss of death to a good candidate, either."
As the FDA goes forward with its acting chief, Lester Crawford - the deputy commissioner and veterinarian who temporarily steered the agency before McClellan came aboard - Feldbaum, who has been at the helm of BIO for 11 years, aims to settle with his wife just north of Ketchum, Idaho, this summer.
"Whether we get to stay is another matter," he told BioWorld Today. "If I have to come back, I'll come back and help finish the process" of selecting the next BIO chief.
BIO's board's plan is to select a search firm in the next couple of weeks, gather opinions, start recruiting and "bring a group of candidates together by the time of our June meeting, [with] perhaps a decision by Labor Day."
Candidates might come from the political realm, the industry or the scientific world. The ideal person might have experience in each, "since a trade association is such an unusual organism to begin with," Feldbaum said.
"An interesting thought more than a few of us had is that Mark McClellan would make an excellent successor," he added.
That's apparently not in the cards, but what lies ahead for Feldbaum is a much-anticipated life of hiking, climbing, fishing and biking.
"My wife and I, like a lot of people our age, have had a couple of medical adventures and we're both in fine health," he said. She's a psychologist and plans to set up a practice in Idaho. Feldbaum might write a book.
"Just an idea, but it would be to make the industry accessible to average, smart readers - to the layperson," he said.
Give that average, smart layperson a little biotech knowledge and they might try investing in the biotech market. And the number of public companies is growing. On the final day of the conference, attendees listened to a panel talk called "Going Public Under the New IPO Order."
Douglas Raymond, a partner in the Philadelphia law firm Drinker Biddle & Reath, said the "hostile" IPO zone is due to changes at the SEC, Nasdaq and the New York Stock Exchange.
The Sarbanes-Oxley Act, signed into law last year by Bush and intended to clarify the way companies arrive at their financial results, "puts in a host of new requirements," Raymond said. "The most important ones have to do with having your I's dotted and your T's crossed on all of your accounting procedures to a level of detail that many public companies today still don't have."
Under the law, loans to company directors and officers must be paid off when the company files its registration statement, and correspondence about disputes between the SEC and the company now is publicly available.
"The good news is that you can go and see what your competitors, who are already public, have been fighting with the staff about over the last several years, which can be interesting from a competitive position as well as from the standpoint of trying to figure out what potholes you want to avoid in drafting your own documents," Raymond said. "The bad news is that all your disputes with the staff are going to be played out in this fishbowl environment."
Among the IPOs recently priced was Carlsbad, Calif.-based CancerVax Corp., which raised $72 million in the offering last fall. David Hale, president and CEO of the firm, was among the panel members with Raymond.
"In the past, if the investment bankers were convinced, you almost knew that the firm was going to end up backing your IPO and becoming one of your bankers," Hale said. "I don't think that's the case at all today. In addition to working the investment bankers, you've got to work the analysts" - who, he added, "have become the final determinant of whether an investment bank actually decides if they are going to support an IPO for a company."
Deepa Pakianathan, general partner with Delphi Ventures in Menlo Park, Calif., noted that "the boards [of most private companies] are stacked with venture capitalists and typically have only one or two outsiders and are not ready, in the short term, to go public."
New rules make the effort even trickier.
"It's complicated, even for people who have been through the process before," she said.