Life science firms pitch optimism
New products, profits on the way, investors are told
SAN FRANCISCO - Richard Pops, chief executive of
“This year is going to be a big year,’’ Pops said.
Earlier, the new president of Natick’s
Biotechnology, pharmaceutical, and medical device company leaders from around the world, including dozens based in Massachusetts, have converged here for the 28th annual
This year’s event has drawn more than 6,500 bankers, analysts, other industry insiders, many wearing dark suits and transmitting real-time business intelligence to Wall Street and the big Boston mutual fund houses via BlackBerries and other smartphones.
While there have been uncomfortable moments involving two major Cambridge companies - Henri Termeer defending his leadership at
Clinical trials have yielded encouraging data over the past year in areas ranging from cancer and diabetes to virology and immunology. And while the window for initial public offerings has been closed, companies have been raising more money in follow-on offerings than any time in the past decade, about $6 billion in 2009, according to Lillian Stern, a Lexington native who is principal at Stern Investor Relations, a New York advisory firm catering to biotechs.
“People are here looking for new ideas,’’ Stern said. “The biotechnology industry had its most productive clinical trial year ever last year in the midst of the recession, and the most money has been flowing into dedicated health and biotech funds since 2000 when people were excited about the prospect for genomics.’’
The enthusiasm at the conference hasn’t been focused on a single theme. Some executives have emphasized their drug development prospects, others their business models and alliances, and still others their moves to shore up their financial strength in a business that demands a lot of money from investors.
“The things that we try to do are inherently difficult because we’re pushing the limits of the science,’’ said Pops from Alkermes. He talked about the anticipated approval by the Food and Drug Administration of drugs to treat Type 2 diabetes, and heroin and OxyContin addiction, both growing problems in the United States.
Another huge market opportunity lies in a drug being developed by
Ray Elliott, who was hired last year as Boston Scientific’s chief executive, said he has been busy making leadership changes, broadening research investments, cutting costs, and increasing the company’s global sales and marketing focus. “We’ve got marketing groups,’’ Elliott said. “We just have to turn them loose more. . . . At 7 in the morning, the worldwide sales numbers are on my desk.’’
Charles River Laboratories also has been reducing its overhead, moving this week to slash operating costs by about $20 million by shutting a Shrewsbury plant with about 300 employees. But chief executive James Foster said his company is offering a compelling value proposition: It helps other cost-sensitive companies lower their research and development spending by allowing them to farm out to Charles River lab testing, animal testing, imaging, and other services.
“Our role is becoming more important as pharmaceutical and biotechnology companies continue to outsource their infrastructure,’’ Foster said. “The rate at which they’re doing that is accelerating.’’
Several life sciences executives outlined their changing business portfolios and product mixes.
Mansfield laparoscopic equipment maker Covidien Ltd., the former Tyco Healthcare division, has been developing new products such as specialized sutures and hemorrhoid staplers while divesting unprofitable businesses like sleep diagnostics and European baby diapers, said Covidien chief executive Richard Melia.
Echoing the sentiments of many industry executives at the conference, Melia said, “It’s been all about growth, but it’s now at the point where we have to start thinking about earnings.’’
Robert Weisman can be reached at firstname.lastname@example.org.