I'd like to conclude with your assessment of how the dealmaking world is likely to change over the next three-year planning
cycle in biopharmaceuticals. What are the game-changers looming on the horizon and how should companies prepare?
Funtleyder: The Jumpstart Our Business Startup [JOBS] Act enacted by Congress last year is a crucial piece of legislation that will have
a significant impact on the capital markets that help finance pharmaceutical innovation. Among other things, it will shape
the size of certain deals, add new players to the financing roster through encouragement of "crowd funding," and ease the
terms for registering for IPOs. Venture philanthropy as a pathway to drug development will gain momentum. In summary, the
JOBS Act democratizes the stakes in bringing assets forward; some of the new players will succeed, others will stumble. Everyone
from entrepreneurs and billionaires to patients groups are going to be empowered to intervene more in the choices that drug
companies make in funding drug development. It changes the dynamic where right now an individual can invest her life savings
in a Malaysian mining company but is barred from buying into an early stage Parkinson's disease research company in the hope
of finding a cure for her own mother. It will require great skill for dealmakers in sorting all this out. But I am confident
that in three to five years we will see a lot more assets turning up—taken off the shelf—because they have been better capitalized
with this new money.
Rieger: The major change underway is the decline in the autonomy of the physician in favor of the payer, to the point where any business
development assessment will need to begin with agreement on whether the payer will pay. The next few years will also see a
tipping point on pricing for biologics and specialty drugs for oncology and other rare individual diseases. Specialty segments
are getting crowded and by 2015 payers and insurers will have more choices, making the industry a price-taker. Patients will
need to be recruited to defend the pricing status quo. Overall, the pressures on pricing must be baked in now to the valuation
of these assets.
Ladha: The dealmaking future is hard to predict; it seems from my experience that for any deal to go through, a million parts have
to fall into place. The one enduring truth is that innovation—in the end—does get rewarded. Deals are always going to get
done for assets that are innovative and advance the prevailing standard of care. It matters less if that deal is in the form
of a license or an acquisition or contains an "earn out" provision or contingent value rights—what it provides for clinicians
and patients will drive the returns. I also believe that investors will remain tolerant about the timelines for recouping
their investment, if the product and value proposition is right. I am also positive about the contributions we are beginning
to tap from the growth of emerging country markets—the question is finding ways to leverage these ideas and bring the world
together. Emerging markets will be the source of much new competition, and we need to know their industries better. Deals
can help drive this.
Paau: The vital thread for us in academia is that pharmaceutical companies are much more willing to partner. The debate on climbing
the ivory tower is over. I see this sentiment only growing more pronounced the remainder of this decade, and the mutual learnings
from these ties are going to result in new and better medicines.
William Looney is Pharm Exec's Editor-in-Chief. He can be reached at