Market Sentiment Hard times – but the model is sound


While the European sovereign debt crisis keeps capital markets in a choke-hold, with potential negative effects on the financing situation in many industries – including biotech – there was encouraging news for drug-developing firms in the sector across the pond. Gilead wants to pay $11bn to acquire Pharmasset, a US-based clinical-stage pharmaceuticals developer (only three assets in clinical

trials between Phase I-IIb) with a focus on treatment options against viral infections (hepatitis C). This appears a very attractive price, at least at first glance. It also indicates in our view that demand for attractive pipeline assets among bio­pharmaceutical companies remains high. Even though capital markets are very unsettled, when it comes to financing, we regard news like this as encouraging.
However, the situation appears to be different for life science tool and equipment providers. Qiagen’s move to reduce its total headcount by around 10% is a good indicator in our view of the market environment for this branch of the sector. Q3 industry results have shown that demand from academic research institutions and pharma companies has continued to be as sluggish as it was in Q2. With the debt crisis in the Eurozone and the stressed debt situations in the US and the UK, we expect that the situation for publicly-funded R&D will also remain difficult throughout 2012. On the upside, some areas appear to have better growth perspectives. Qiagen is not just trying to improve its margins by reducing its cost base, but will also shift the resources that are freed up towards its key growth areas. That means Molecular Diagnostics in general, and Personalised Healthcare in particular. We continue to find the emerging Personalised Healthcare concept attractive. In this vein it is important to note that

Roche, one of the leading companies in the area, just announced that its cobas EGFR Mutation Test has received a CE mark for European marketing. The diagnostic is able to identify non-small cell lung cancer (NSCLC) patients that have mutations in the EGFR gene, and who might therefore benefit from treatment with

Roche’s Tarceva.

Financing environment remains challenging

While the financing environment for the biotechnology industry as a whole thus remains a challenging one, we believe the basic business model remains intact. The biopharmaceuticals industry is still searching for attractive new pipeline assets, and new markets continue to evolve in segments – like Molecular

Diagnostics – that are driven by innovation.

Germany, FranceGermany


Martinsried/Paris - Sanofi has done some Christmas shopping in Munich and has licensed Scil Technology’s programme for the regenerative treatment of osteoarthritis and cartilage disorders. Under the agreement, Scil could reap up...



Monheim - It's nearly Christmas, and Bayer Crop Science gives out some presents. As the company announced, a $750 million settlement with U.S. rice farmers is now binding and can move forward. In summer the German firm had agreed...



Bonn – Germany’s federal government is prolonging one of its most successful measures to date for stimulating the establishment of high-tech companies – the High-Tech-Gründerfonds (HTGF). The HTGF was launched in 2005 with €272m...



Leverkusen – One short statement from the European Medicines Agency (EMA) means one giant step for German biotech company Biofrontera. The agency issued a favourable opinion on the firm’s marketing approval application for its...



Heidelberg – There is still life in the European life science finance. EMBL Ventures has closed a €40m fund. The early stage investor and the venture capital arm of the European Molecular Biology Laboratory(EMBL) announced the...



Düsseldorf – BIO-Europe 2011 in Düsseldorf has again broken all previous records in terms of participants and company numbers. More than 3,000 representatives from 1,800 companies registered for Europe‘s largest partnering event....



Brussels/San Francisco – As the biggest biotech partnering event on the continent, BioEurope, draws to a close, the venture capital community sent ambivalent messages for life sciences. Dow Jones VentureSource, an analyst,...



Leverkusen - Bayer Pharma has a lucky streak. The pharma division of the German chemical giant announced positive Phase III results from regorafenib in colorectal cancer. “We are extremely encouraged by the result of this...

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