Biotech companies riding out latest period of turbulence, new report … – The San Diego Union-Tribune

In its relatively brief lifetime, the biotechnology industry has swung between exuberance and despondency.

In an uncertain environment, the best path is to stay the course, according to a report released Monday by the professional services firm EY (formerly Ernst & Young).

To stay the course means continuing to invest in new technologies and trusting in the long development cycles of biotech to provide return on investment despite short-term fluctuations, the report said.

Issued on the opening day of the massive Biotechnology Innovation Organization convention in San Diego, the annual study said the biotech industry is in good shape by historical standards.

In 2016, overall financing was down, but the early stage venture ecosystem remained healthy, the report stated. In fact, biotech enjoyed its third-best financing year ever, despite a drop in proceeds from initial public offerings and follow-on rounds.

Revenue for American and European biotech companies reached $139.4 billion in 2016, up 7 percent from a year earlier. However, net income dropped 52 percent to $7.9 billion. And financing dropped 27 percent, to $7.9 billion.

San Diego Countys biotech companies pulled in $3.8 billion last year, an 11 percent increase over 2015. They incurred a net loss of $1.6 billion.

In the San Diego region, biotech venture capital financing leveled off around $1 billion for last year, about the same as 2015 but still up from about $400 million in 2013 and about $700 million in 2014, according to the new report.

Much of San Diegos financing went to genomics companies.

For example: San Diego-based Human Longevity raised $220 million in April 2016. That was the second-largest U.S. venture financing for that year, exceeded only by the $474 million raised by Moderna Therapeutics of Cambridge, Mass.

While the new administration of President Donald J. Trump has introduced uncertainties for the life-sciences sector, the report said some of the presidents appointees will help the biotech industry grow.

Biotech organizations and executives agree the recent appointment of FDA Commissioner Scott Gottlieb will help to maintain the industrys regulatory momentum, the EY report said. Gottlieb may also be in a position to curb some of biopharmas worst excesses: He has signaled a desire to speed generics to market as a way to counter high drug prices in niche markets where one company enjoys a monopoly.

Some of that competition is already coming.

On Thursday, San Diegos Adamis announced it had received FDA marketing approval for an epinephrine injector that will compete against the EpiPen thats currently sold by Mylan for more than $600.

Mylan has received extensive negative publicity for jacking up the price of its injector, which uses a generic drug to counter allergic reactions.

According to a recent New York Times article, when asked about the EpiPens high price, Mylans chairman, Robert Coury, raised both his middle fingers and explained, using colorful language, that anyone criticizing Mylan, including its employees, ought to go copulate with themselves.

Biotech companies are more comfortable charging high prices for new drugs that address unmet needs, because these drugs improve on the standard of care. The report said investments appear to be increasingly concentrated in two such areas: rare diseases and cancer.

In particular, both venture investment and the public market bets appear to be focused on immuno-oncology companies, the EY authors wrote.

bradley.fikes@sduniontribune.com

(619) 293-1020

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Biotech companies riding out latest period of turbulence, new report ... - The San Diego Union-Tribune