Back in 1973, when I was in my first year at university, Stanley Cohen and Herbert Boyer perfected the techniques for splicing DNA from one species into the DNA of another. This was the beginning of genetic engineering and modern biotechnology. As a student I was fascinated and was immediately drawn into this new science, primarily because I felt that it was one that could help rid the world of disease and suffering. Many of us felt at the time that we personally would be the ones to find the cure for cancer! I did pursue a career as a genetic engineer, but as time went by realised that, despite advances in these technologies and subsequent discoveries, pursuit of this goal would require far greater scientific resources on a global scale. Furthermore, it would also require significant public financing, as well as the evolution of private finance in the form of risk-based venture capital and continued investment by larger pharmaceutical companies.
Some 32 years later biotechnology has started to demonstrate that it could deliver that promise: there are now over 190 biotech-based products on the market and a further 370 biotech drugs and vaccines in clinical trials for over 200 diseases.
"Biotech is often considered too risky for investors. What our industry needs now is government support for those who take on the substantial risk of drug development"
Despite these achievements we still have a very long way to go to overcome some devastating diseases, and drug development is very dependent on those companies and investors who are prepared to take risks. There is no doubt that we have the scientific and management skills to deliver the promise that biotechnology has to offer. What is less clear is whether we will continue to have the right financial environment to deliver that promise.
Demands for lower priced drugs will lead to a reduction in R&D investment and the preparedness of large corporations to take on the riskier research and development projects that are so desperately needed. Moreover, the current IPO markets in the US and Europe are cooling the funding of entrepreneurial biotechs, which are often considered too risky for investors. What our industry needs now is government support for those who take on the substantial risk of drug development. This can be done by understanding the need to pay a fair price for drugs to those who have taken the risks to develop them, and also by providing tax incentives to long-term institutional investors in innovative biotech companies.
The current message of the Biotechnology Industry Organization (Bio) in the US is that 'Biotechnology Means Hope', and Bio is absolutely right, but we know this can only happen if the best possible financial and economic environment is attained.
Fintan Walton
Chief Executive Officer
PharmaVentures Ltd