By
James DeGiulio --
Industry
investor and analyst Steven Burrill (at right), CEO of Burrill & Co., reports that a record
$55.8 billion was raised by the biotech industry in 2009, which constitutes an 85 percent
increase over the $30.1 billion recorded in 2008. Mr. Burrill noted that these results were driven by $37 billion
in financial partnerships between large drug companies and biotech startups,
but warned startups that licensing their most promising developments will
ultimately lead to long-term limits on company growth. "You're not going to
grow a lot more Genentechs or Amgens," Mr. Burrill said. His comments regarding 2009 biotech funding were reported in an article appearing in the San Francisco Chronicle ("'Big Pharma' feed biotech startups record funds").
Smaller
biotech firms hope to use partnerships to fund the development of a biomedical
breakthrough while retaining enough control to preserve the growth potential of
the company. In order to survive a
tough year, biotech startups have increasingly been forced to turn to
partnerships and licensing for revenue production. Though smaller biotech firms
have had success in developing marketable drugs, these firms have typically
struggled to meet the cost of developing drug sales efforts. Partnerships and buyouts have become an
easier way to raise the necessary capital than initial stock offerings.
James DeGiulio has a doctorate in molecular biology and genetics from Northwestern University and is a third-year law
student at the Northwestern University School of Law. Dr. DeGiulio
was a member of MBHB's 2009 class of summer associates.
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