Gore, companies talk recession’s effect on biotech

Posted May 5, 2010 at 1:38 p.m.

al-gore.jpgFormer Vice President Al Gore gives the keynote address to the Bio International Convention this week in McCormick Place. (Phil Velsaquez/Tribune)

By Bruce Japsen | The economic crisis could be preventing the next life-saving drug or medical treatment from reaching consumers, say biotech companies and their leaders.

According to data provided to the Tribune at the Biotechnology Industry Organization’s annual meeting in Chicago this week, the banking crisis that has tightened lending and investors skittish about risky propositions including biotechnology have led to a 25 percent decline in public biotech companies.

In January 2008, before the collapse of U.S. financial markets, there were 394 publicly traded biotech companies filing with the Securities and Exchange Commission. This year, there are 295 companies public companies.

“There has to be some apprehension about the economic uncertainty,” former Vice President Al Gore told hundreds of attendees at McCormick Place on Wednesday.

“Fifty biotech companies went bankrupt for lack of access to capital,” said Jim Greenwood, president and chief executive of BIO, which represents more than 1,200 companies, universities, state biotech centers and related organizations.

One Chicago-area public biotech company that failed last year was Evanston-based Northfield Laboratories Inc., which failed to win Food and Drug Administration approval for its blood substitute Polyheme.

The company faced problems, including safety risks with its product, but it also could not attract investors for additional trials, industry analysts have said.

“There are things that we could have done and would have done, but it became evident we were not going to be able to raise sufficient funds,” said Steve Gould, former Northfield chairman.

For private companies, the story is not much better. BIO said it has seen a 30 percent decline in annual “venture funds raised since 2007.”

It takes more than $1 billion and a decade of research and clinical trials to bring a drug to market, BIO executives say.

Despite the economy, there have been successes.

Take Seattle-based Dendreon Corp., which raised $1.2 billion from when it was formed in 1995 until last week’s much-anticipated approval of its novel prostate-cancer treatment known as Provenge,  a “therapeutic vaccine” that targets cancer by stimulating the patient’s immune system to fight tumors.

“If it was not for the support we got from the investment community on Wall Street, we would never be where we are today,” said Dr. Mitchell Gold, 43, a Highland Park native who runs Dendreon and a member of the BIO board of trustee.


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