On January 10, PricewaterhouseCoopers, the California Healthcare Institute, and BayBio released preliminary findings of its California Biomedical Industry 2012 Report from a survey of biomedical industry CEOs. The findings were released at a panel discussion with three CEOs active in the healthcare space:
- Rick Winningham, CEO of Theravance
- Stephen Cary, PhD, CEO of Omniox
- Alex Lukianov, CEO of Nuvasive
(MD+DI provided a recap of the CEOs' reflections. See: "Three Life Science CEOs Explain Why Their Firms Are Staying in California" and "Nuvasive CEO: FDA's Policies Will Cost Company $70 Million.")
Perhaps not surprisingly, the healthcare companies surveyed cited the uncertain FDA regulatory environment and lack of access to capital as the two greatest threats. Access to capital was of particular concern for startups.
Among other findings, 74.2% of biomedical industry CEOs reported that their companies were forced to delay a research or development project in the past year. Lack of funding was the top reason for project delays cited by private company CEOs. Eight in 10 CEOs surveyed agreed or strongly agreed that the current FDA regulatory approval process has slowed the growth of their organization. "And certainly capital access and what is happening at FDA in the next couple years is going to be a crucial element," said Tracy Lefteroff, global managing partner, life sciences industry services at PriceWaterhouseCoopers at the event.
"[It] continues to be, by historical standards, a very tough environment for a young company to depend on for capital."
Lefteroff also noted that there had been a "huge pickup" in corporate venturing. "And I think we will continue to see [more corporate venturing] activity in the short run because big [life science companies] are the major beneficiary of most of the products that are coming out through the merger and acquisition activity and the partnering and licensing activities that they conduct."
Speaking on the initial public offering (IPO) market, Lefteroff said that it "continues to be, by historical standards, a very tough environment for a young company to depend on for capital—not only to fund their existing clinical trials and operations, but certainly for expansion."
The roughly 100 participating in the survey hailed from the diagnostic, therapeutics, med device industries across California. The mix of companies in the report was diverse, from startups with one or two employees to multibillion dollar giants. About a third of the companies had no revenue and roughly 40% were venture backed early stage companies,
The briefing provided a preview of the full report findings, which will be released at a briefing on February 8 in Sacramento.