Skip to main content
Premium Trial:

Request an Annual Quote

Big Pharma


Though Big Pharma Remains LukeWarm on Genomics, Genotypers May See Respite First

R&D budgets at big pharma are expected to continue expanding into 2004 and beyond, but that doesn’t mean these firms will invest in new genomic tools or services any time soon, according to a recent panel discussion.

But genotyping instruments and services, largely because of their proximity to clinical trials and a wide appreciation of their potential application in personalized medicine, may emerge from the current market slump ahead of other genomic disciplines.

“There’s nothing on the horizon” like the success of the genomics or proteomics technologies that have appeared in recent years, said Margaret Flanagan, global alliance director at AstraZeneca. “Nothing that we consider buying. Genomics and proteomics had quite a bit of hype. But validating targets is still a slog.”

A number of economic events have resulted in a severe pull-back among most pharma and biotech firms in new-technology spending. According to the panel, which comprised an analyst, an investor, and officials from pharma and tool companies, these events jelled into a kind of “perfect storm” that impacted the entire life-science industry. The panel discussion was held at the BIO CEO & Investor conference, held in New York last week.

Chief among these events has been the underperformance of certain genomic technologies in the eyes of drug companies, according to Jeremy Levin, president and CEO of Physiome Sciences. “Not enough results,” he said. Wall Street became jittery and jaded, and instrument and service providers began to suffer from lack of business on the customer side and a lack of interest among institutional investors and venture capitalists on the business side.

“Investors in pharma companies began to think that investing in gene databases was discretionary spending,” said Thomas Weisel analyst Paul Knight. “This is because databases provide a long-term payout, not a short-term payout.”

“I think there is evidence of doom and gloom, and I think [the SNP-genotyping] arena is affected as much as any other,” agreed Jeremy Levin, president and CEO of Physiome Sciences. “But the doom and gloom is also somewhat different here: Remember that in the SNP arena, SNPs have already passed into the hands of relatively mature … companies.

“They’ve passed out of the hands of the venture capitalists,” he explained. “And I think that’s a very important distinction.”

The distinction, he said, is that venture capitalists may observe the bruised stock prices at existing companies as a benchmark that will eventually cause them to frown on new genotyping or haplotyping companies that may have proven technologies.

Additionally, there exists the belief that “there is a fundamental difference” between pharmaceutical companies and their investors, Levin said. Pharmas want drugs and believe new tools may help them speed the process. Their investors want drugs, but they haven’t forgotten that investments in most new genomic tools largely have failed to generate much of what they promised. This is one reason why panelists universally agreed that the superheated M&A market is “an enemy” of investment in new technologies.

The last event was what Levin called a broad job “migration.” Beaten by the soft market, tool and services companies began laying off researchers and selling off technologies. In the wings waited pharma companies, who happily snatched up downsized staffers and installed them into new in-house centers designed to perform the same research and development as the truncated tool companies.

“We shouldn’t fool ourselves and think pharmas and biotechs will continue to buy ... tools and services,” said Levin. “They will take what they can and set up their own services division.”

Though he stressed that the “jury is still out” on the way pharma customers will be buying SNP technologies when the instrumentation and services markets reappear, Levin pointed to “the good work” done by companies like Genaissance and GlaxoSmithKline with SNP- and haplotype-based technologies. “In the long term this is going to be very productive and highly successful,” he said. “It’s absolutely going to be.”

Filed under

The Scan

Study Reveals New Details About Genetics of Major Cause of Female Infertility

Researchers in Nature Medicine conducted a whole-exome sequencing study of mote than a thousand patients with premature ovarian insufficiency.

Circulating Tumor DNA Shows Potential as Biomarker in Rare Childhood Cancer

A study in the Journal of Clinical Oncology has found that circulating tumor DNA levels in rhabdomyosarcoma may serve as a biomarker for prognosis.

Study Recommends Cancer Screening for Dogs Beginning Age Seven, Depending on Breed

PetDx researchers report in PLOS One that annual cancer screening for dogs should begin by age seven.

White-Tailed Deer Harbor SARS-CoV-2 Variants No Longer Infecting Humans, Study Finds

A new study in PNAS has found that white-tailed deer could act as a reservoir of SARS-CoV-2 variants no longer found among humans.