in the room, and sometimes I feel quite hairy, but having the 800-pound gorilla on your side at times like these is not a bad place to be.” (There were no arguments there from conference organizer Christoph Westphal, CEO of Cambridge-based biotech Sirtris, who has operated the firm as a unit of GSK since the drug company shelled out a whopping $720 million to acquire Sirtris last year.)
—On the future of venture investing, expect to see fewer VC firms raising smaller funds, but raising them more frequently than in recent years, said veteran biotech investor Alex Barkas, cofounder and managing director of Prospect Venture Partners in Palo Alto, CA. Barkas—who in true West Coast fashion sported casual boat shoes, kaki pants, a yellow shirt, and a brown vest—said that smaller funds would reduce the need for big exits and would lower the fees that VCs charge to manage funds. He also expects venture firms to raise funds with more focused investment goals than before.
—Jean-Francois Formela, a partner at the Waltham, MA, office of Altas Venture who moderated a VC panel, asked his panelists to comment on a novel business model for biotech-focused venture firms: to fund drug-development projects under the management of the venture firm as opposed to the traditional model of raising money to create new companies to manage such projects. This model would remove the need for CEOs and executive teams, reducing the overall capital burn rate of the company. Credit Formela for raising the level of debate. Still, Greg Weinhoff, of CHL Medical Partners in Stamford, CT, said that he thought that CEOs were too important in moving programs forward to do without them.
—On the topic of innovation, I got one interesting view when I interviewed former retinal surgeon Gene Ng, who is now an analyst for life sciences hedge fund RA Capital in Boston. Ng pointed to Lexington, MA-based AMAG Pharmaceuticals (NASDAQ:[[ticker:AMAG]]) as an example of an innovative company because its experimental iron-replacement drug ferumoxytol (Feraheme) for people with kidney disease could be given to patients at doctors’ offices rather than at infusion clinics like existing treatments. “Innovation has to be grounded in reality,” Ng said, “and it’s probably not something that is risky science where markets may not exist.”
