TO BE honest, as a venture capitalist I am a little bit bored with the simple “me-too” concepts companies have been presenting lately and the onslaught of press releases that hail new alliances between big pharma and small biotech companies. All of these deals have one thing in common: they entail enormous investments from the big company into the small company, revealing the continued dependence of the biotech companies on the larger corporate sponsors they serve.
As a venture capitalist, I am much more interested in biotech companies that are seeking to break new ground and have a strategy for taking the lead in investing their IPO funds in a more creative fashion than the rest of the crowd. In my opinion, genomics companies should aim to offer big pharma and healthcare firms new and unique technologies and platforms.
Take for example the recent deal between bioinformatics player Lion Bioscience and Gesellschaft f r Medizinische Datenverarbeitung, a software company that develops and markets an innovative medical data platform, e-health solutions, which is used to manage medical records, virtual patient records, and clinical trial information. Under the terms of the deal, the two companies will begin work on jointly developing software modules for the discovery of the causes of diseases all the way through clinical trials. They will also explore opportunities for individualized diagnostics and therapies.
What’s so exciting about this idea? The alliance will allow Lion to be among the first biotech attempting to meet the enormous challenge of making some real sense of the human genome data that is now available by linking it up individual patient records.
Via e-health solutions GMD will offer Lion access to millions of patient data files which represent the general population, as opposed to a distinct ethnic group, thereby allowing Lion to track the genomic causes of the most common diseases such as diabetes and hypertension. E-health solutions can also support world wide clinical trials, speed up clinical data tracking, and provide a more efficient way of managing clinical data in Phase three of drug development – the critical and most expensive phase in the process.
This promising alliance bridges the gap between biological, pharmacological, and chemical data and real clinical patient data, and promises to provide one horizontally integrated software platform that will have the potential to speed up genome based drug development for major disease areas.
Is this really feasible?
To establish such a visionary concept you need supportive shareholders who are not only looking for quarterly results but are also interested in the long-term strategic development of the company. Fortunately for Lion and GMD, Europe is an ideal place for such mid- to long-term strategies since European VC’s tend to be more open to long-term return-on-investment perspectives.
However, there are many more hurdles to overcome. The companies will have to find ways to work within the restrictions of European patient data protection laws, develop methods to integrate their disparate hardware and software platforms, and work together to create an interdisciplinary team that will consist of the most creative and knowledgeable software development experts.
In addition to this impressive deal there is also a rumor circulating that Lion is on the verge of hiring a group of top management people from a leading California-based cheminformatics company. If this rumor proves true, Lion, which has also acquired US-based cheminformatics company Trega and forged a $25 million deal with Tripos and Bayer, will be in an outstanding position in the industry to cover the four major areas of drug discovery: biology, chemistry, pharmacology, and medical data with predictive tools based on a fully integrated and homogenous software platform.
From my perspective, this is just one example of the visionary and risk-taking approaches that will help to change the way we do medicine and treat patients in the future. Other biotech companies that are entering the expensive minefield of drug development should develop alternative ideas and concepts that really stand out, if they hope to attract fresh VC funds. If the long-term view of the potential return-on-investment looks equally promising, such concepts may enable the biotech scene to eventually become independent from big pharma. And, even if they fall short of independent, I suspect they will still become extremely successful and profitable.
Gunnar Weikert is the CEO of Inventage, a Dusseldorf-based venture capital fund. Until recently he was global head of physiomics at Bayer, where he negotiated blockbuster deals with Millennium, Lion Bioscience, and CuraGen. You can e-mail him at [email protected] .
TrendSpotter is a weekly column that focuses on how trends in politics, patent law, and the US and European markets affect the genomics industry. The column appears every Friday. Next week Rochelle K. Seide, a lawyer and IP specialist with Baker Botts, will discuss patent law’s implications for the genomics industry.
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