I’d like to see people get back to the concept of building companies. The venture capital community over the last seven to eight years has really gone toward binary outcome type of plays. As a result, they run into a boom and bust cycle of their own creation.
This is opposed to conceptually building sustainable enterprises, based on what the biotech industry was all about to begin with: new science that leads to the ability to create new therapeutics to benefit patients.
You hear a lot of consternation now from venture capitalists regarding carried interest and whether it’s taxed long term or short term. But you have to ask yourself, if we are really after innovation, then the industry as a whole needs to invest in true innovative technologies, and not play a marketing game associated with how they differentiate product A from product B.
Big science, big ideas, innovation. This is what the biotech industry needs to be based on. Repurposing compounds, while there’s a business to be made there, is not biotech. You’re hearing this from somebody who has been in the business since the early 1990s. The creation of this industry was predicated on new approaches to developing therapeutics.
Unfortunately, the industry—and the VCs have led the way in their quest for returns in shorter and shorter periods of time—have really opted for binary outcomes and later-stage type clinical assets. They truly haven’t been as innovative as they need to be.
Dendreon is an example of true innovation. Dendreon is now seen as a great success. But it hasn’t been a short cycle. And that is what we have to bear in mind as an industry. How do we foster more Dendreons that are successful because they brought something new and innovative to the therapeutic regimen that physicians have to treat patients?
[[Editor’s Note: Walker’s article is part of a series of guest posts we are running as part of the launch of Xconomy San Francisco. It was based on this question we are posing to technology leaders: “What 3 things can San Francisco and Silicon Valley entrepreneurs and VCs do to foster a more stable environment for innovation in IT, life sciences, and energy, and become less wedded to cycles of boom and bust?”]]
