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Biotech CEO report: key issues | Whitepaper


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Stingy capital markets make for turbulent times

Biotech CEO report: Key issuesAs suggested in Deloitte’s 2008 Biotech CEO Survey report, Life Sciences Investing – Venture Capitalists’ Views of Industry Challenges and Opportunities, the recession came to fruition and wreaked havoc on the capital markets, creating a challenging time for the Biotech CEO. Heading into 2009 the big unknown is the duration of the recession, making capital for the Biotech CEO a scarcity. Across the board, the number one goal of the Biotech CEO is to weather the storm and create as much clinical progress as possible.

The strained capital markets have forced the Biotech CEO to make challenging business decisions affecting the number of programs in the pipeline and the human resources devoted to these programs.

To solve the challenges of the capital markets, many Biotech CEOs have turned to partnering with Big Pharma. While Big Pharma has a strong appetite for partnership to solve pipeline challenges, the sheer number of Biotech CEOs looking to partner their assets has lead to noise in the partnering market.

In addition to the “noise,” CEOs are dealing with complex human capital challenges created by stock options that are underwater and compensation committees comprised of venture capitalists that have been deeply affected by the drop in company valuations. In 2009, the theme is simply the fittest will survive. The bright spot or hope is that the new administration will not only stimulate the capital markets, but also allocate much needed resources to reform the FDA to streamline the clinical process.

Through a recent Deloitte survey of Biotech CEOs, we learned that the capital markets affect on raising capital, partnership opportunities, pipeline advancement and human capital weighed heavily on the minds of the CEOs. While raising capital has been difficult in the past, many CEOs are questioning whether we have seen this level of severity.

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