Biotech VC Down 20% in US as Policies Drive Away Foreign Investors, BIO
Summary
David Thomas, vice president of Industry Research at the advocacy group, told us, that Congress “expanded the regulation to include biotechnology as one of these core areas that needs to be governed for national security purposes,” and additional procedures have made foreign investors look to other markets.” US companies with foreign investment now have to go through an application and review process which can take months and involve substantial legal fees, Thomas told Xconomy journalist Mike Ward at the recent BIO-Europe event in Hamburg, Germany. If you have genetic data stored on your server, you would also potentially [fall] under the rules and regulations, so that is pretty much everyone working in cancer and rare disease where you need some type of genotyping,” he added. This latest expansion of CFIUS is only in a pilot stage, and Thomas said continued advocacy could help reverse the VC spending trend. The Congressional Budget Office (CBO) said in October that the Bill could lead to a reduction in revenues of $0.5 trillion to $1 trillion over the next 10 years and “would lead to a reduction of eight to 15 new drugs coming to market.” BIO’s own analysis, done in conjunction with the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Council of State Bioscience Associations (CSBA), has placed the figure at around 56 fewer new medicines for patients over the next 10 years, but Thomas told us the actual figure could be even higher in the longer-term. It would be devastating to innovation.” And with most pharma firms fixing their R&D budgets as a percentage of their revenues – roughly 15 to 20 percent – controlled drug prices would mean less R&D, less innovation, and less money for partnering activities, he added.
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