Event Summary: Providing a Roadmap for Success in an Active Yet Volatile Market
Nutter hosted Acceleration2015 on November 11 which brought together executives, investors and entrepreneurs in the biotechnology, pharmaceutical, medical device and digital health industries to discuss unfolding issues around innovation and business acceleration. Drug pricing and IPO fatigue are emerging as factors that will drive the life sciences sector over the next year according to expert panelists. This was the fourth Acceleration conference hosted by the firm.
Convening Life Sciences Leaders
“The goal of Acceleration is to bring newly formed and midstream life sciences companies together with investors for insight sharing and collaboration,” said Michelle Basil, chair of the Nutter Life Sciences Group. “We were tremendously excited to hear what people had to say this year, and to see the amount of creative thinking that’s going on both in finance and in the lab.” Nutter works closely with innovative companies who are developing and commercializing sophisticated technologies, recent examples of which include molecular therapeutics, robotic exoskeletons, thermal ablation therapies, and other ground-breaking medical solutions focused in the areas of hemostasis and wound healing.
Keynote by Omar Amirana
The event kicked off with a keynote from Dr. Omar Amirana, Senior Vice President at Allied Minds, a pioneering company that forms, funds, manages and builds startups based on early-stage technology from universities and federally funded research institutions. He addressed the growing healthcare market, the opportunity that data collection presents for healthcare IT ventures and encouraged entrepreneurs with inspired ideas to form early stage companies.
“Entrepreneurs today in the healthcare sector must be passionate and realistic,” said Dr. Amirana. “Specifically they should work to have alignment with investors so that there is agreement on the exit strategy and should attempt to maximize optionality as the company progresses. No one path is guaranteed so having flexibility in terms of finance, operations and staff is critical. By being aligned with investors and maintaining optionality you will always find a path to the end zone.”
Panel One: Drugs, Devices and Diagnostics: Will the IPOs, M&As and investments continue?
- Ben Dunn, Managing Director, Covington Associates
- Bryan Giraudo, Managing Director, Leerink Partners
- Paulina Hill, Principal, Polaris Partners
- James Woods, Principal, Deals, Valuation, PwC
- Moderated by Luke Timmerman, Founder & Editor, Timmerman Report
For the biotechnology sector, most of 2015 was marked by heightened M&A activity, an abundance of investors and excitement over major advances in drug discovery. In the fourth quarter however, the negative effects of the drug pricing controversy caused instability in the market. The first panel discussion examined what is in the cards for biotechnology companies moving forward, and whether or not the IPOs, venture capital funding rate, and exits will slow or remain at such a torrid pace.
Other key insights included:
- We could be facing a period of IPO fatigue. Investors are preferring to learn more about the investments they are currently in versus repeatedly investing in new deals. IPOs will get tougher in 2016 but there will be windows to go out in November and then again in January.
- Other panelists were bullish on the long-term prospects for life sciences companies due to the robust ecosystem that’s been created. New therapeutics and technologies are helping to extend life and people will continue to pay for such value.
- There’s a healthy amount of VC money earmarked to invest in innovative therapies, but companies may not get the same valuations as companies that went public in the last few years.
- Some innovators are welcoming the spotlight on drug pricing right now as the more agile companies are well positioned to produce therapeutics at lower prices.
The panel agreed that investors are more focused on the specialty cures and orphan diseases versus incremental drugs that address more prevalent diseases, but questioned which path was more lucrative in the long-term and which would create more of a lasting impact.
Panel Two: Market Viability: What are the prerequisites for success?
- PJ Anand, Founder, President & CEO, Alcyone Lifesciences
- David Donabedian, Venture Partner, Longwood Fund
- Jason Hafler, Senior Director of Investments and Principal, Sanofi-Genzyme BioVentures
- Moderated by Jeremy Halpern, Partner, Emerging Companies, Nutter
In discussing the long-term viability for firms and what that means for exits in 2016, a second panel tackled possible strategies for success. These included:
- Having solutions that are transformative and solve a significant unmet medical need while also sustaining good business practices.
- Entrepreneurs should spend resources on building an incredible team that can do an incredible job with less money.
- Have a strong story for investors to convince them of the therapeutic need and its potential success in the market.
- Great CEOs manage their boards and tell them what they need to be successful. Great boards support CEOs without micro managing to actualize the vision.
- When seeking funding, be thoughtful in the approach and the selection of the investor. Look for investors who offer more than just funding and negotiate from a position of strength (i.e., when money is not the main goal of the meeting.)
- Entrepreneurs should balance laser focus on an application with building a platform that has multiple “shots on goal.”
To see more photos of Acceleration2015 please visit the gallery.
Nutter is a top-tier ranked Boston law firm that represents an international roster of innovative clients involved in a range of sophisticated technologies in the medical device and diagnostics, biotechnology and pharmaceutical industries. Nutter also counsels renowned medical institutions and universities, emerging growth companies and angel and venture capital firms. The interdisciplinary life sciences team provides clients with a comprehensive service solution – from intellectual property and transactional advice to government enforcement, products liability and regulatory matters. Nutter has been in practice for 135 years; the firm was co-founded by Louis D. Brandeis in 1879.