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Pharma Versus Biotech

Avalon Ventures' Kevin Kinsella tells Xconomy San Diego that big pharma's "predatory business practices are pushing the [biotech] sector almost to the point of extinction." Kinsella believes the pharmaceutical industry's practice could potentially be very detrimental to biotech firms, says Xconomy's Bruce Bigelow, adding that they may even be destructive to the entire drug development "ecosystem." Bigelow explains:

By behaving, in [Kinsella's] estimation, unethically and unpredictably, offering lousy deals to partner biotech products, trying to outwait venture capitalists to force them into negative-return exits, the pharma companies have created and are fueling a vicious cycle that will leave the ecosystem with fewer venture capital funds, less capital to invest, fewer biotech companies, fewer critical and creative therapeutics, and far fewer innovative drugs for pharma's own pipelines.

Kinsella "may well have a point," says In the Pipeline's Derek Lowe. If Kinsella is correct, then smaller biotechs may begin to dissolve while larger pharmas shy away from external collaborations. Then the chances for "mutually beneficial partnerships" will become rather slim, Lowe says.