In part one of our deep dive into the business and financing developments in the emerging and exciting field of immune-oncology, we focused on the red hot partnering activity that is taking place. This article looks at some representative deals from the investment capital flowing into early stage companies. (See BioWorld Insight, May 31, 2016.)
SAN FRANCISCO – A great deal has changed since the Biotechnology Innovation Organization's (BIO) International Convention was last held in San Francisco some 12 years ago in 2004. One obvious change is that BIO returns sporting a brand new name designed to reflect the remarkable progress and groundbreaking innovations its members achieve in healing, fueling and feeding the world, the trade association said when the new name came into being at the beginning of the year.
Although the immuno-oncology (I-O) field is still in its infancy, the industry's fascination with the technology continues to soar with investments and partnerships in the space being announced almost weekly as biopharma companies look to add promising cancer therapeutics to their pipelines. With the plethora of deals inked last year, the question becomes, Can this pace for I-O assets be maintained given the fact that immuno-oncology continues to attract many players?
Several interesting ongoing story lines reignited investors' interest in biotech during the month and helped halt the slide in the sector's valuation. Biopharma M&A is always an attention-grabber and Sanofi SA's hostile $9 billion-plus bid for Medivation Inc. provided that, with the latest chapter seeing the pharma seeking to oust the Medivation board and replace it with its own slate of candidates. There has also been an intriguing subplot with Amgen Inc., Celgene Corp. and Gilead Sciences Inc. all rumored to be contemplating their own bids for Medivation.
Significant progress has been made in ophthalmology, with biopharma companies working on innovative treatments for sight-threatening diseases. As the research accelerates, promising gene therapy, stem cell-based and biopharmaceutical product candidates have progressed into clinical trials. Those innovative next-generation therapies will be welcomed as millions of people around the world suffer from blinding retinal degenerative diseases.
The Alliance for Regenerative Medicine (ARM) has released its first quarter industry report that describes a regenerative medicine sector, which includes gene and cellular therapies, in healthy shape. Growth is evident on a number of fronts, even in the wake of the uncertain financial environment that has prevailed and depressed the capital market since the beginning of the year.
According to Moody's Investors Service, the global pharmaceutical industry is on track to realize annual earnings growth of 3 percent to 4 percent over the next 12 to 18 months. Moody's believes the strong underlying fundamentals of the industry will be able to offset the effect of the strong U.S. dollar and political environment bringing increased scrutiny on the price of drugs.
After being knocked down for the count in the first quarter of the year, the biopharma sector got off the canvas to post significant gains in April. The industry will be looking to maintain that renewed investor interest as its blue chip companies report their first quarter financial results. Strong earnings results and a positive outlook for the rest of 2016 will go a long way to counteract the negative sentiment, which continues to swirl around drug developers generated by the drug price "gouging" debate.
The world's population is aging and that statistic means the incidence of chronic and serious life-threatening diseases is also on the rise. One of those conditions that challenge health care systems around the world is osteoporosis, a skeletal disease, which brings with it significant economic and health burdens.
After two incredible years for public offerings, including IPOs, in the biopharma sector, deal flow and volume ran out of steam in the first quarter of the year, particularly during February and March. The reason: a precipitous drop in biopharma company stock price valuations caused by a confluence of factors, including a broader equity market correction and lingering concerns about global growth and an economic downturn.
