CellFactors: Bringing the Commercial to Biotech
When UK cell therapy company CellFactors failed to raise money last year, one of its shareholders stepped in as COO, bringing commercial experience and a customer focus to a group that lacked both. CellFactors is still a risky bet, but its recent progress suggests that European biotechs have much to gain from managers with a track record in other sectors.
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Two years ago it looked as if all was lost at Pharming: escalating costs for its Pompe's disease program and indebtedness to its JV partner Genzyme forced it into legal moratorium in August 2001. Today, Pharming's back in the game; indeed, its new management, slimmed down operations and heightened focus on cost control mirrors the many other European biotechs trying to adapt to the harsh winter. But Pharming could have avoided near death by not turning its development partner into its biggest creditor. Still, the firm's turnaround-even this far-shows a reassuring willingness among Europe's investors to assume risk and give companies another chance.
Chiron's acquisition of PowderJect is the most recent sign that the vaccines industry is coming of age, taking the field's only two mid-sized players up among the top-ranking Big Pharma. This deal was largely about infrastructure. But it suggests any European biotech with a valuable asset--be it product or distribution network--is an attractive takeover target for US firms.
A handful of private European biotechs have raised money, but the process takes time, and the sums aren't great. Since VCs can invest in late-stage companies at the same prices they used to pay for newer ventures, early and mid-stage biotechs are being forced to broaden their search for funds, and meet growing demands for cost cutting and detailed spending plans. Both VCs and biotechs may emerge stronger from the squeeze, however.