BIO International Convention, one of the largest networking events hosted for the biotech industry, has been influential in helping biopharmas discover new opportunities and building and strengthening partnerships within the biotech and pharma community.
This year, the event took place from June 5 to 8, in the bustling biotech hotspot of Boston, Massachusetts, and saw hearty participation from more than 18,000 biotechnology and pharma leaders. We have teamed up with our parent company, the leading biopharma partnering platform Inova, to deliver the top insights from the BIO International Convention.
Table of contents
Deal making with AI and big data
New Frontiers in Drug Discovery and Development
Artificial intelligence (AI), machine learning (ML), and advanced data science techniques have touched many industries in recent years, not least of which is biopharma. At the BIO International Convention, a strong and diverse Digital Health conference program that has focused on the role of these new technologies in advancing patient care, developing new therapies, and driving innovation but, in this panel, the focus was clearly on how this technology is impacting deals and partnering.
Charity Williams, former CEO of medical device startup Veritract and now partner at Cooley LLP, hosted a panel that drew together experts in biopharma AI to explain the current state of the market and explore where there are opportunities for growth. The panelists, including Nawal Roy, CEO of Holmusk, and Bhaskar Dutta, head of Digital Health at Alexion Pharmaceuticals, and Kevin Heyries, CBO of Inceptive, shared insights, beginning with their views on where AI stood in the biopharma ecosystem today.
Heyries argued that AI will become more integrated with drug development practices and will move up the food chain, with companies maintaining a competitive advantage if they can build unique platforms. Roy concurred, and added smart risk and smart capital will help push AI forward into spaces like mental health. For his part, Dutta believes that AI can help in better science, better operations, and better integration of a drug into a patient’s lifecycle but noted that the real transformational change is expected on the regulatory side, with more guidance and clarity anticipated.
On the business and dealmaking side, the three panelists talked about how AI will change the way the world looks at intellectual property (IP) and how to navigate the changes to IP. Specifically, there is going to be a shift from therapeutic efficacy being the key value-add of an asset to the data around a set of biomarkers, algorithms, and physical molecules being a source of enormous value. Yet, no matter where the value lies and what sort of deal might be in development, the panelists agreed that where a biopharma AI deal happens still matters a lot, and Europe is running behind the pack. “I don’t want to make a cliche statement,” Roy said, “but usually the deals happen faster in the U.S. versus Europe. That’s usually the case. Deals even happen faster in Asia than Europe.”
Data, of course, is critical for drug development, from identifying new targets to conducting clinical trials and gaining regulatory approval. However, the data landscape is complex and diverse, with data sources ranging from electronic health records to genomic data to social media. To address this challenge, pharmaceutical companies are increasingly partnering with other organizations to gain access to the data and expertise needed for drug development.
Companies with experience in data science, analytics, AI and ML models, and a track record in generating value from data that pharma companies have not been able to leverage previously. Roy offered an example of this data in discussing opportunities in advancing mental health therapies. “Within the mental health space, there is a huge amount of unstructured data beyond the structured data that is in the notes of the doctors,” he said. “This unstructured data was not necessarily part of the thinking when a company is doing patient phenotyping. We are probably one of the few companies that have been able to do that in a very meaningful fashion, and we have been doing it for the last eight years.”
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Navigating partnering in a down market: finding post-pandemic opportunity
The COVID-19 pandemic saw an enormous level of investment driven into the biopharma sector. Yet, in the post-pandemic period, the market has turned somewhat more south. With venture capital drying up and the bottom falling out of the biotech IPO market, the panel session titled ‘Navigating Partnering in a Down Market’ could not be timelier. Jay Parris, Venture Partner at Arch Venture Partners, Ken Drazen, CEO of Arsenal Biosciences, and Sophie Kornowski, CEO of Boston Pharmaceuticals, shared their insights on the best way to partner in this new economic reality, with moderator Kate Hillier of Cooley starting the conversation by asking the panelists where the challenges and opportunities lie today.
The panelists highlighted how, for small companies, there is a new struggle to raise sufficient capital. As a result, both consolidation between struggling companies and non-traditional deals are becoming more common. However, expectations need to be set, as these deals are not likely to be flashy deals seen during an up market. As one panelist put it bluntly, “You’re just not going to get that flashy $100 million upfront deal.”
In the current down market, it is important to prioritize transformational assets and to be honest about the costs and potential of those assets when negotiating deals. They also highlight the importance of having a good alliance management team, building relationships with partners, and investing in personal interactions to build trust in business. “Once that deal is inked, it’s going to get bigger,” said Parris. “Having a good alliance management team, that’s talking to the other side and understands that we’re going to get 80% of the way there, and 20% we’ll figure out along the way.”
Kornowski, though, suggested that small companies should be cautious about entering into deals that may ultimately cost more than they are worth. Instead, these companies may be better off monetizing their assets early-on, so they are well-positioned to be acquired later.
Moving into the practicalities of partnering, the panelists noted the importance of relationships in the biopharma industry and noted how essential trust-building remains. When setting targets, they cautioned against relying too heavily on comparable deals, and instead, argued that internal assessments should be completed to determine what the company needs as well as what it wants. If the final deal value requested is backed by a strong due diligence process and if the cost of capital and the net present value (NPV) of the asset have both been assessed, you have something that can be justified in a negotiation. “It might be a high justifiable number, but you can stand your ground,” summarized Hillier. “If you come up with something that’s just a number out of the air and you’ve got nothing to back it up, then there probably is some loss of face.”
The art and science of applying AI in the race to protect global public health
Is AI delivering a revolution in biopharma development, is it an accelerator for global health care innovation, or is it another ‘next big thing’ that won’t deliver on its significant hype? For panelists discussing ‘The Art and Science of Applying AI in the Race to Protect Global Public Health’, there was plenty of optimism about the potential for AI to contribute to future therapies, as well as some caution around its unregulated or irresponsible application to biopharma development.
Panelists Nathaniel Moorman (Co-founder, READI), Patrick Verhoest (VP Medicine Design, Pfizer), and Hamza Ghadyali (Senior AI Specialist, SAS) joined moderator Peter Young (Pappas Capital), who kicked things off by asking what contributions AI and ML were making to drug development and healthcare today. For the panelists, these technologies are revolutionizing the accuracy and efficiency of small molecule drug design, enabling scientists to predict how molecules will interact with each other and with biological systems. Moorman argued that “the democratization of discovery” is another area where AI and ML are making a significant impact, with companies and researchers already using these technologies for “enhanced screening and optimization.”
Moorman explained how READI is using AI in their drug discovery projects. READI uses AI structural modeling programs like AlphaFold to extrapolate from the few structures of their targets that exist to understand how those structures are conserved. They also use in silico studies to optimize small molecules for action against all the targets they are pursuing. For his part, Verhoest explained that Pfizer also uses AI to design small molecules for a variety of disease indications. By finding patterns that are statistically significant in large data, they can make discoveries, predictions, and explorations that inform their drug development efforts.
However, despite these efforts and early successes from top pharma companies like Pfizer and non-profit research labs like READI, there remain challenges. One of the biggest issues faced by AI and ML adopters is the industry’s siloed data, which makes research and innovation extremely difficult. To make progress, researchers and scientists need to break down those silos and collaborate better, sharing data in a way that still respects privacy and personal identifiable information (PII). Moreover, the need for high-quality data is another challenge. While there is already a large amount of healthcare data available, much of it is neither standardized nor readily accessible. Additionally, there are concerns about data security, as well as the potential for biases in the algorithms used to analyze the data.
Still, despite the challenges for AI and ML in healthcare, the panel remained rather optimistic. Ghadyali explained that “it’s very important that we leverage all the tools that we have, including AI and machine learning” in developing responses to global health challenges. AI and ML can aid in the deployment of drugs and vaccines, and algorithms can monitor electronic health record (EHR) data in real-time to identify patterns, and signal when something is different. The promise of AI is strong, even if the fruits of this innovation are still mostly blossoms on a larger tree.
Partnering to get ahead of disease together
Collaboration and partnership in biopharma have become increasingly important in recent years. Top pharma companies are increasingly collaborating with smaller biotechs to fill their pipelines and generate innovations, some of which were impossible to imagine just a few years ago. GSK is typical of this approach, and on this panel, its Chief Scientific Officer, Tony Wood, joined his colleague and head of Business Development, Chris Sheldon, to highlight two partnerships that the company has established with Wave Life Sciences and ViiV Healthcare.
Paul Bolno, CEO of Wave Life Sciences, and Wood explained how their collaboration on RNA medicines has brought value to both firms. The RNA editing platform developed by Wave Life is a unique technology that can be used to manipulate RNA molecules in a way that was never possible previously. Together, they have been working on developing new treatments for pulmonary and hepatic disease using RNA editing technology, creating new therapies that target specific diseases and medical conditions. By working together, these companies can create a more robust development pipeline and bring innovative treatments to market.
In the field of HIV treatment and prevention, GSK has made significant progress. Its HIV business is 100% focused on delivering better medicine for people living with HIV, and it has been able to shift the paradigm from needing three drugs daily to now offering long-acting options that only need to be dosed every two months. Long-acting HIV treatment and prevention have been a game-changer for people living with HIV, reducing the stress and fear associated with taking daily medication and the risk of developing resistance to the medication. “We’ve been told by patients that taking a pill every day is a daily reminder of the fact they’re living with HIV,” explained Sheldon. “When we gave them long-acting treatments, they said that it was liberating, it was literally life changing, and we like that; it’s a good thing to change people’s lives in a positive way.”
GSK has partnered with ViiV Healthcare on HIV, and Kim Smith, SVP Research and Development at ViiV, explained that it is this commitment to changing lives for the better that is at the foundation of their work together. “It’s such a great match for us to be working together,” she said. “We have a passion to change the patient treatment experience.”
This alignment between partners is important as, when it is lacking, collaboration can suffer. Effective communication and goal setting are essential to overcome the challenges of smaller companies partnering with multinational firms, and it is important to establish clear guidelines for how to handle potential areas of conflict early in the process of working together. With effective due diligence and trust-building, partnerships in biopharma can deliver the sorts of positive results that GSK, Wave Life, and ViiV have already demonstrated.
From C-suite to VC: lessons from the biotech trenches
The biopharma ecosystem is diverse, encompassing everything from small laboratory teams through emerging biotechs, venture capital investors, healthcare advocacy groups, business advisory and expert consultants, and multinational pharmaceutical companies. Moving from a leadership role in one part of this ecosystem to a similar role in another part is not unusual, and usually it provides a chance for individuals to leverage their expertise and knowledge in new ways. For this panel, former biopharma executives turned venture capital investors Sheila Gujrathi (Ventyx), Maha Katabi (Sofinnova), Maria Fardis (Frazier Life Sciences), Mary Hedley (Eli Lilly), and Kimberly Ha (KKH Advisors) offered insights from their own journeys through the industry, and advice for biotech leaders in today’s down market.
Forming strong partnerships was a common refrain amongst the panelists for a variety of reasons. Partnerships, in particular, cross-border partnerships, provide companies with access to a wider pool of scientific talent, resources, and markets, which can lead to better products and services and help to establish a global network of contacts and collaborators. Transnational partnerships can help to bridge cultural and language barriers, providing companies with a better understanding of different markets and consumer preferences, which, in turn, can lead to better products and services. This can be critical for securing new business opportunities and staying ahead of the competition.
Yet, such partnerships can pose several challenges that biotechs need to carefully consider and navigate. One of the main obstacles to cross-border partnerships is communication, as different countries have different norms and expectations when it comes to business communication, which can lead to misunderstandings and breakdowns in negotiations. As a result, it is important to establish clear communication channels and expectations from the start, to ensure smooth collaboration and win-win relationships. Another challenge is differences in due diligence processes which can complicate the evaluation of potential partners where companies or venture funds from different countries may not employ the same standards of diligence.
The panelists also spoke to the challenges that biotechs faced in securing venture capital or other investments to drive their innovations forward. To attract investors and secure financing, biotech companies were encouraged to develop a compelling story, aim to partner early, consider alternative forms of financing, and build relationships with investors as well as with top pharma teams. Biotech leaders should keep their teams focused on execution, make sure they know their valuation, and be prepared to pivot their business if circumstances or clinical results demand it.
Finally, the panel turned their attention to the biopharma nonprofits and small, early-stage companies. While their general advice remained the same, they also urged these groups to be more flexible, remain realistic about the market they are raising capital in, and to be open to new ideas and collaborations. Smaller companies are usually more agile and have a capacity to make decisions faster than larger organizations in the biopharma ecosystem, leaving them perfectly positioned to meet their clinical, fundraising, and business goals.
Partnering 2030: The Biotech Perspective 2023
