VC Funding Floods Colorado Biotechs, But Will It Stifle Innovation?

Posted under Biogen, Blog, Colorado, Companies, Deals, Diagnostics, Funding, Guest Blog, Medical Devices, Medical Supply, OnBioVC, Pharmaceuticals, Startups, Stewart Lyman, Universities, VC, venture capitalists, Videos by Guest Blogger

By Marylyn Donahue.

Biotechs in Colorado, US, are enjoying a windfall of funding from Venture Capitalists who have to date invested $66.1 million in six of the state’s companies working in the fields of biofuel, medical devices and biopharma, according to a report released Feb 21 by OnBioVC, a Boulder-based tracker of investments in the life science industry.

The increase in money invested in the Colorado companies parallels a national trend. OnBioVC counted 305 companies received a total of $6 billion in 2011, up from 281 companies that collected $5.2 billion the previous year.

Small biotech have always been synonymous with innovation. Will that still hold true with this model? The question is asked this month by Stewart Lyman, a Seattle consultant, in an article in Xconomy.

“While this new model may generate good financial returns for VCs, is there much data to support the idea that this approach will succeed in generating new and useful drugs? Will it siphon money away from other approaches? What effect will adopting this model have on the biotech ecosystem?” asks Lyman.

His point is that the biotechs who have survived and thrived in the past quarter century such as Biogen, Immunex, and Genentech have been companies that established relatively large, cutting edge research programs that hired young, innovative scientists by promising them a certain degree of intellectual freedom to pursue research projects and build their reputations on the results.

“While these researchers were well compensated financially for their efforts, I don’t know of a single one who signed on for the money. Their true reward: the ability to make ground-breaking scientific discoveries, publish and present their data in prestigious journals and conferences, and help turn them into breakthrough medicines for treating serious medical problems,” he goes on.

Five years ago, in the heyday of small biotech funding, VC’s footed the bill for small companies with research staffs and brick and mortar headquarters. That proved not to have weathered economic hard times. This time around, VCs seem to be favoring the “virtual model,” small, single project startups who outsource R&D. Good for the funders, but not necessarily for drug development.

The primary goal of venture capitalists is to invest in companies that can be liquidated (via acquisition or IPO) for a significant return in a relatively short period of time. But are virtual companies counter to the very definition of the biotech ecosystem? asks Lyman. Having to outsource core skills will they loose hat biotechs have always been heralded for—talent? Will contract workers perform with the same passion as those who are directly invested in the success of a new drug?

“Can remote oversight substitute for walking down the hall to get your questions answered?” asks Lyman.
And where is the ability to follow-through if a single product does not deliver? The venture capitalist doesn’t suffer. But then who does?

“Every time a venture capital firm boasts about a biotech acquisition that provided a substantial return on their investment, let’s keep track of whether or not the acquired asset actually makes it to market,” says Lyman. “I’ve yet to see a sick patient cured by an infusion of stock warrants or the cutaneous application of cold, hard cash.”

BIO Applauds Boulder County Decision

Posted under agriculture, Benefits of biotech crops, Blog, Colorado, Companies, Diagnostics, Farmer Gene, Food And Agriculture, Funding, Medical Devices, Medical Supply, Pharmaceuticals, Plant biotechnology, Startups, Sustainability, Universities, Videos by biotechnow@bio.org (Biotechnology Industry Organization)

After much debate, Boulder County commissioners sided with science and voted to allow some biotech crops to be grown on county-owned land.

Six farmers leasing the county land came forward in December 2008 seeking permission to plant herbicide tolerant sugarbeets. After more than two years of hearings, protests, studies, and debates, policy that includes a decision on GMOs was approved.

“With our adoption of the Boulder County Cropland Policy on Dec. 20 we believe we have taken some very positive steps toward a more sustainable future for agriculture in the county we love and call home,” said Commissioners Cindy Domenico, Ben Pearlman, and Will Toor in a statement published in Boulder’s Daily Camera.

“As local farmers have moved to genetically engineered corn and sugarbeets, we have seen reductions in the toxicity and amount of pesticide and herbicide used, as well as reductions in erosion and runoff.  We have also seen significant increases in yield coupled with a decreasing carbon footprint resulting from fewer passes across the field.”

The Colorado Daily reports that both sides of the debate had a large turnout for the public hearing, with farmers organizing to make their point that the benefits of genetically modified corn and sugarbeets outweigh the risks.

The Boulder County Business Report also covered the issue in a December 21 article.

What’s important in this situation is that farmer choice is protected.  Coexistence is alive and well in Boulder, with large and small farms sitting side-by-side. Farmers growing biotech crops, organic crops and conventional crops can utilize both private and public land to the betterment of the community.  This case proves – once again – that sound agricultural policy is not black and white, winners and losers and either/or.  It’s about farmers and the community working together so that all forms of agriculture can contribute to goals of sustainability.