Docs at BIO: Steve Burrill's State of the Biotechnology Industry Report 2009

    By Kevin E. Noonan --

What a difference a year makes.  Steven Burrill (at right), President and CEO of Burrill & Co., unveiled his company's "State of the Biotechnology Industry" report on Tuesday at BIO 2009 in Atlanta.  Mr. Burrill described what he termed "a sea change" that has occurred over the past several months, changes that have altered his rather optimistic proscriptions for the future set out in last year's report.  Then, his report concentrated on global developments that he anticipated will occur by 2020 and how those changes will impact the industry.  This year, he was much less sanguine about the future.

The two major changes to have occurred since last June have been, of course, the economic meltdown since last September and (perhaps less negative but just as significant) the election of Barrack Obama as President.  Indeed, several of Mr. Burrill's slides depicted the President in various guises commenting on the state of the economy and the economic bailout he (as his predecessor before him) has implemented in response.

But Mr. Burrill's message was anything but optimistic.  Indeed, on several fronts he described a situation that will get worse before it gets better, ranging from unemployment (which he believes will peak at about 20%; it is already close to that figure in Indiana and Michigan) to the capital markets (where he contrasted the situation a year ago, when a $5 million investment procured a 5% stake in a biotechnology company, to today, where the same stake may result in a 90% stake).  And Big Pharma will not be a savior, according to Mr. Burrill, since these companies know that the price will always go down if they have the patience to wait.

Unlike Mr. Burrill's futuristic musings of a year ago, the economic crisis seems to have refocused his talk to his core competency:  assessing company strengths, cash reserves, and burn rates to inform investors.  He descried the consequences of the economic downturn on the industry, where a substantial portion of biotechnology companies have less than 6 months cash at hand to cover their current outlays, and where many public biotechnology companies are trading below their capitalized value.  And in view of the tightness in the capital markets, the situation is unlikely to improve any time soon, according to Mr. Burrill.

However, as he did last year Mr. Burrill suggested that a paradigm shift would be necessary and could provide a way out of the morass currently plaguing the industry.  Pursuing overseas sources of capital is one illustration of his "think outside the box" recommendations.

Mr. Burrill's vision remains "futuristic" in terms of technology and social trends existing in the present day.  He did not admit that one of his predictions from 2008 -- that primary medical care will be provided by "wellness centers" staffed by nurse practitioners relying on both diagnostic technology and personal medicine -- has instead seen WalMart close most of these types of wellness centers over the past year.  Mr. Burrill attributed this outcome to bad business models rather than any flaw in his vision of the future of medical care.  And he remains committed to the idea that the future of medicine will be an emphasis on medical monitoring and surveillance with regard to "lifestyle" choices such as smoking, alcohol consumption, and diet that will replace the "reactive" current model of treating disease, particularly chronic diseases of aging, only after they have developed.

The complete Burrill Report can be purchased from Burrill & Co.; sales at BIO 2009 include a CD-ROM of Mr. Burrill's presentation slides, and attendees of Mr. Burrill's presentation received a free copy of the CD-ROM.  Patent Docs will provide additional reports regarding Mr. Burrill's presentation in subsequent posts.

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