Biotech’s Healthy Vital Signs

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By Robert Israel

Put your fingers on the wrist of the biotech industry. Now start counting as you read the results of a report released by Merrill Lynch that showed 35 percent of publicly traded biotechnology companies have less than year’s worth of cash left.

Next consider the results of a survey, published in BioCentury, which shows that at least 45 biotechnology companies in the United States and Europe have announced layoffs or cutbacks.

The pulse might be irregular, but the biotechnology industry has not flatlined.

There are other vital signs worth noting. This was — issued by a research team of Richard Barry Joyce and Partners in Boston — states that Massachusetts biotechnology market is growing and will continue to flourish, as evidenced by the demand for commercial real estate in Cambridge and MetroWest.

While no region is immune to the vagaries of the economy, our region may show increased vitality due to our long history of serving as a mecca for medical research, much of it pioneered by leading colleges and universities in the area. Boston and Cambridge have always been favored targets for the National Institutes of Health when it comes to awarding grants for research and clinical studies.

Also, 20 of the nation’s top 100 biotech companies are based here. More than 250 biotech firms have chosen to make this state their headquarters, employing over 58,000 people.

So the prognosis should be a healthy one, once the industry grows stronger from a transfusion of better economic times, right?

The answer is a reserved yes. If one looks deeper into the Richards Barry report, it states that of the 281 biotech companies in the Commonwealth, 23 are testing drugs or therapies in clinical trials. The key to success is developing the compounds through all phases, leading up to and including approval for marketing the products from the Food and Drug Administration (FDA).

Historically, the bottleneck to the development of these new products has been finding the right number — and the right kind — of patients to participate in clinical research trials. It can make or break a company.

Why? The FDA requires companies to test drugs in many clinical research trial phases before a drug can be marketed. The FDA is not only requiring more testing but it is also requiring more participants to be part of that testing.

Recently, the biotech company Akzo Nobel in the Netherlands found out what happens when this process is suddenly truncated. According to a report, Akzo Nobel’s shares tumbled more than 9 percent in Amsterdam before they ended the day down 3.7 percent. The reason: the company could not find “clinical participants with the right profile.”

There is no denying that the process of bringing a product to market can take years. Yet biotechnology companies can remain healthy throughout this lengthy cycle if they better prepare for the challenges before them.

By developing a strong and dynamic business model and sticking to it — envisioning the role of patient recruitment from the onset rather than at the end of the process — the results will be more effective and efficient.

Companies should also view the challenges before them from the marketing side. Putting patients at the center of the equation will help them find a wide range of questions that marketing processional know how to answer. In short, looking at product, price, place and promotion provide a new level of insight to the process.

Biotechnology companies will continue to flourish because there are many more compounds to discover and many more products to market in a world that is clamoring for medical breakthroughs.

By learning from companies like Akzo Nobel, biotechs can avoid problems by enacting simple and effective planning and monitoring of the data every step of the way, until their products are proven safe and ready to release to patients.

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Robert Israel is a Boston-based writer and editor. An earlier version of this report appeared in Mass High Tech.

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