Last Tuesday, delegates descended upon the London Stock Exchange for the Consilium Strategic Communications Annual Healthcare Conference. For those who couldn’t make it, here they’ve provided us with a handy round-up of the day’s highlights.
The pressure on healthcare R&D productivity is a familiar refrain for the pharmaceutical and biotech industries. Former Science Minister and Powderject founder Lord Drayson, opening the Consilium Strategic Communications Annual Healthcare conference, offered two fresh twists on this issue – both borrowing from the tech industry – which he thinks may offer an interesting roadmap for healthcare.
Lord Drayson highlighted the work of the Structural Genomics Consortium, which uses an “open source” approach to identifying new targets, and also talked about the huge potential offered by digital health and the need for the healthcare industry to move away from models based around treating disease towards models based around keeping people healthy.
His speech struck the right note in kicking off a wide-ranging afternoon meeting covering the following topics:
- Novel funding mechanics –various approaches to drug development funding
- Go West: “Attractiveness of the US market” –focusing on the lure of the US listing for European biotech, its merits and shortcomings
- Big Data – “The future of healthcare?” how data will shape the patient experience and the industry business model
- Capturing Value in Innovation –looking at IP and how to protect and enhance it
- An Interview on Big Pharma – “does M&A create value or reduce costs?”
The funding mechanics panel explored different approaches to financing, from the funding round to newer strategies such as the royalty bond, and asked whether European investors in general have become more comfortable with risk. The panel showed as wide a range of views on financing methods as the companies themselves, from the CEOs of Zealand Pharma and Helsinn, David Solomon and Riccardo Braglia, discussing the virtues of bonds to Adaptimmune’s CEO James Noble who, in his own words is “allergic to debt”.
With more European companies eyeing US listings, the “Go West” session examined the benefits and debunked some myths about US listings. The consensus was that while there are advantages for a European company– a bigger pool of specialist investors and greater stock liquidity among them — listing shares in the US is no panacea for the problems of an up and coming European biotech. As Edwin Moses, CEO of Ablynx put it: “You have to look at the company fundamentals and not just assume that tipping across the Atlantic will increase the valuation.” Justin Gover, CEO of UK-based GW Pharma – which has made a success of a Nasdaq listing – agreed that while GW’s US-listing has brought benefits, it has not been without drawbacks, among them the need for constant shareholder education, a significant compliance burden and increased cost.
Capturing Value in Innovation looked at how to turn some of the formidable science from Europe’s universities into valuable companies. London’s deputy mayor, Kit Malthouse, a backer of the MedCity initiative, was vocal about the importance science plays in creating wealth, and the need to connect the investment which is abundant in London with the world class science in the UK’s universities. “We have lots of money in the City, but not enough is finding its way into life sciences,” he said.
In the Big Data session Lord Drayson, flanked by Ken Noonan from LEK Consulting and Povl Verder from SIME diagnostics, discussed the threat of disruption to the healthcare industry from the big players in tech, among them Google, Amazon and Oracle.
The conference was rounded off by a lively discussion between the Financial Times pharmaceutical correspondent Andrew Ward and Francois Maisonrouge, senior managing director at Evercore Partners. Maisonrouge put up a spirited defence of the role played by M&A in shaping the healthcare sector and helping companies adapt to change. He noted that while crude deal integration can destroy value, some deals don’t get credit until long after the event, such as AstraZeneca’s ground-breaking 2007 $15.6 billion acquisition of MedImmune. Regarded at the time as an expensive disappointment, this is now credited with laying the foundations for the company’s new pipeline. Asked whether Pfizer’s recent approach to AstraZeneca was driven by the value of its pipeline or by Pfizer’s hunt for a lower tax jurisdiction, Maisonrouge said: “I don’t think Pfizer were going after AstraZeneca’s pipeline. I think everyone discovered AstraZeneca had a pipeline in the course of the [deal] defence.”