Biotech: Record Investments in Pioneering Firms

By January 30, 2015

A series of recent investments in the biotechnology sector reflect the innovative power of specialised pharmaceutical firms making scientific breakthroughs in the development of new treatments.

The first fortnight in January saw some well-attended biotechnology industry conferences in San Francisco. As every year, these gatherings provided a platform for investment firms to meet up with innovative companies. The highest turnout this year was at the 33rd annual JP Morgan Healthcare Conference on 12-15 January and the Biotech Showcase on 12-14 January, which brought together the main biotech sector stakeholders for the seventh year running.

The San Francisco events were indeed an opportune moment to look at the results for 2014, a year in which the biotech industry loomed large, with 81 companies making their stock market debut. Health and biotech investor Stelios Papadopoulos thinks that 2015 could be another notable year for biotechnology, with for example Google Ventures focusing hard on this field. Major advances in medical science achieved by R&D breakthroughs at specialist biotech companies include more efficient DNA sequencing and the development of new treatments for a number of chronic illnesses.

The conferences showcased both the latest innovations on the health front and recent high-value transactions in the market. Among the major deals announced, Roche Holding is acquiring, for a total of around $1 billion, a majority stake in molecular and genomic analysis specialist Foundation Medicine, which develops clinical diagnostic tests that facilitate personalised cancer therapies. Around the same time, Jersey-registered, Irish-headquartered biopharmaceuticals group Shire announced its takeover of US firm NPS Pharma, a biopharma specialist focusing on rare diseases, showing no hesitation about investing some $5.2 billion to strengthen its position in this field. That same day, Cambridge, Massachusetts-based Biogen Idec, a global biotechnology player pioneering research into multiple sclerosis, revealed that it had agreed to pay $200 million upfront for UK-based Convergence Pharmaceuticals, a clinical-stage biopharmaceutical company, with the shareholders set to receive an additional $475 million further down the road, contingent on performance. Biogen Idec plans to draw on Convergence’s expertise in chronic pain research and clinical development to accelerate the growth of its existing pain treatment portfolio.

Meanwhile, established Californian biotech firm Gilead Sciences and Illinois newcomer AbbVie both announced that they have developed very effective, highly tolerable drugs which they claim could eradicate the Hepatitis C virus over the next 15 years. These recent deals and product announcements from the biotechnology sector illustrate the value of cutting-edge innovation in the pharmaceuticals field. “Meaningful innovation nowadays is most often found in biotech,” underlined healthcare investor and much-followed commentator Nathan Sadeghi-Nejad.


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