Highlights of the important and the interesting from the world of health care:
A new model for life-sciences venture firms? Could a new investment company made of veterans from MPM Capital, OrbiMed Advisors, Pfizer Inc. and Morgan Stanley signal a shift in philosophy for life-science venture firms? VenBio, the new firm, seeks to invest in both public and private life sciences companies, VentureWire reports. “The rigidity with which firms have been built in the past has limited their ability to take advantage of the market cycles,” Managing Director Kurt von Emster told VentureWire.
The new firm was tight-lipped on details regarding its fundraising and investment strategies, but, given the above quote, it seems likely the firm will consider a wide variety of deals. The driving factor behind VenBio’s formation seems to a continued blurring of the lines between public and private when it comes to biotech firms.
Most initial public offerings are financings, not opportunities to cash out, and many newly public companies are so thinly traded that it’s difficult for their venture backers to sell their stakes. As a result, many public biotechs look much like their private counterparts.
The real problem with the federal health overhaul: As many of us who’ve been following the debate have long suspected, the real problem with the federal health overhaul isn’t that people don’t like don’t like what’s in the bills. Rather, it’s that they don’t know what it’s in them, according to NPR’s account of the results of a Kaiser Family Foundation poll. For example, people increased their support of the bills after being told they would provide small-business tax credits to help pay for coverage and that they would ban insurance companies from denying policy to people based on pre-existing conditions. And the fine people at NPR give us one of the understatements of this young year:
Perhaps Democrats’ biggest problem with the bill is not having a strategy to get it passed, but not having a strategy to explain what it does to a public that still seems to want health overhaul.
Yeah, “perhaps.” It continues to perplex why President Obama, once so popular and holder of the world’s best bully pulpit, has been such an abject failure at explaining the benefits of health overhaul to voters. And we’ll likely see just how much of a failure Obama has been in the results of November’s midterm elections. If there’s any good news here for overhaul proponents, it’s that the poll results would seem to suggest that there’s still an opening to rally support if Obama and Democrats can adequately explain the bill to the public. If it’s not already too late…
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Tough times for startups: Given that 2009 was such a bad year for venture capital, it seemed this year couldn’t help but be better, so one would think VCs and companies that seek funding from them should be reasonably optimistic for 2010. Unfortunately, VentureWire throws a little cold water on that by pointing out that VCs in the U.S. last year spent about $7.5 million more than they raised. That means less funding to go around this year for startups, though perhaps a flood of IPOs could get investors contributing to VC funds, but VentureWire doesn’t hold out much hope of that. “A more likely scenario is another year like 2009. That means VCs will have to keep a tight hold on their checkbooks no matter how many great opportunities they think they see.”
The smart-pill revolution: Earlier this month, the Economist published a brief piece that details the current state of the industry focused on smart pills, which are capable of wirelessly trasmitting data to various devices while in a patient’s digestive tract. There are a number of players in the market, many of them small, but look for them to get scooped up by big firms in the vein of Novartis’ acquisition of Proteus a couple weeks ago. Given their obvious usefulness, expect smart pills to soon be coming to a digestive tract near you.
Various studies have estimated that a third to half of prescription drugs are not taken as prescribed—or at all. This leads to poor health: one study estimates needless hospitalisations as a result of such failings cost $100 billion a year in America alone.
