Last night I was at another party in Cambridge, a good friend of mine is leaving Boston to go work for Pfizer in NYC. (Aside - why does it seem like anyone in Cambridge who is not a student or a professor, works for Biotech, Pharma or an IT start up?)
In any case I had an interesting conversation with XXXX who works for a Venture Capital Firm that specializes in funding new biotech startups. We got into an interesting conversation about the current status of the pharmaceutical industry in the US and overseas.
Apparently the pharmaceutical market is in a weird state. Venture Capitalists are very cautious - they're only handing out money to startups that have drugs at very late phases of testing (phase 2-3), but for startups to get a newly discovered drug to phase 2/3 takes loads of cash. So what's happening? Well it seems like many startups are testing throw-away drugs from Big Pharma (aka Giant Pharmaceutical Companies) for slightly different applications. The startups then hope to get Venture Capital interested and then (if everything goes well) be bought up by Big Pharma. As you can see there is a big problem for the whole industry. The only new ideas acceptable to investors are old ideas.
Another interesting item concerning the drug development process is that much of the animal testing is being outsourced to places like Eastern Europe. In addition more of the clinical trials (phase 1 through 3) are also being outsourced. In the near future, all that will be done in the US is the basic research and the drug conception.
One last topic that came up was how Asia may affect the whole Industry. Apparently India has a huge supply of Chemical Engineers, many of whom have made billions in the generic drugs market. Unfortunately the disregard for Intellectual Property (IP) that made generic drug producers so rich has prevented the development of any original drugs in India - if you can't protect your patent, you won't spend the money it takes to develop anything new. Now it seems like the Indian Government has recently changed its tune and passed laws to protect IP to help nurture the development of new technologies. The big question now is whether India has sufficient basic life scientists to generate new ideas for Biotech and Pharma. I asked about China - apparently the lack of IP laws and the shortage in basic research makes China the hinterland. But things may change fast.
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Not to say that your sheltered, but it's probably just the people you hang out with. There are loads and loads of the IT Tech/Pharma/Biotech people in Cambridge, plus students and profs, probably more than anyplace else on the planet on a per-capita basis... but if you wander around East Cambridge, Inman Square, and North Cambridge/Alewife, where gentrification hasn't set in yet, you'll find the plumbers, taxi drivers, and other blue-collar professionals.
Yeah I know - and a great Portuguese/Brazilian immigrant community too. But the number of people in the IT/biotech fields never ceases to amaze me.
"Apparently the pharmaceutical market is in a weird state. Venture Capitalists are very cautious."
Still? They've been like that for 5 years now. I'd have thought the pendulum would have swung back by now.
The same sort of thing is happening in computers and electronics too. The VCs are very cautious and most new startups are "built to be bought."
BTW
"Last night I was at another party in Cambridge, a good friend of mine is leaving Boston to go work for Pfizer in NYC. (Aside - why does it seem like anyone in Cambridge who is not a student or a professor, works for Biotech, Pharma or an IT start up?)"
Heh.
Look at the skyline recently? I've heard the portion near the Charles river called "carbon valley."
Urinated,(I couldn't resist writing that)
I think that the weird state is the whole circular mode of drug financing (trow-away drugs from Big Pharma => startups => recoup by big Pharma) - some would call it insest. And like insest, then result is that there is no genuine new blood (i.e. drugs) in the system.
(Wow rereading this comment, I wonder if it'll be banned in certain countries.)