by one of his VC friends to keep his mouth shut. But since the Xconomy story ran on February 17, he says he has gotten dozens of “attaboys,” along with quite a few critiques. Often, biotech entepreneurs feel that it’s the VCs, not Big Pharma, who usually victimize biotech entrepreneurs with predatory tactics.
I made some calls on Friday to people with experience in Big Pharma/biotech dealmaking to check for reaction to Kinsella’s charges. Not everyone sees this phenomenon the same way as Kinsella, but he clearly has put his finger on something that’s been bothering people in biotech for a long time.
—“It’s about time somebody lays out what’s going on,” says Jim Posada, a pharmaceutical business development consultant formerly of Eli Lilly and Lebanon, NH-based GlycoFi, who’s now the CEO of Seattle-based Resolve Therapeutics. “I’ve experienced everything he mentioned in that article.”
—“All parties involved here—VCs, pharma companies, and entrepreneurs—need to take more of a long-term perspective,” says Daphne Zohar, founder and managing partner of Boston-based Puretech Ventures, a firm backed by multiple pharma companies. “Because when you take a short-term perspective of always trying to optimize your best deal now, you will end up killing the ecosystem.”
—“It’s certainly true that Big Pharma is thought to have a lot of leverage, but it’s usually the case that in any deal, both parties have leverage on certain things. It’s not always so one-sided,” says Fran Heller, the executive vice president of business development for South San Francisco-based Exelixis (NASDAQ: [[ticker:EXEL]]), and a former dealmaker for pharma giant Novartis, She says Kinsella makes “some good points,” and while she says some pharma companies are better organized than others, she hasn’t personally seen the kind of bad-faith tactics that he described.
—One prominent Bay Area venture capitalist summed it up this way: “I don’t think I have the b*lls he has to say this stuff, but generally agree.”
While Kinsella didn’t name names, he didn’t really have to. Biotech is still a fairly small industry made up of specialists who spend their whole careers trying to create, and make money from, novel medicines. Short-term hardball tactics might help spiff up a Big Pharma company’s quarterly income statement, and might boost someone’s stock price for a few minutes one afternoon. But I have a feeling the bullies will get their comeuppance. The ones who act like thugs today will not get the phone call in 2020 from an entrepreneur seeking a partner to help market a new drug for cancer or Alzheimer’s. It will go to the company that behaved in 2011 as if it cares about being in business in 2020.
[Note: BioBeat is a new weekly column in which I will explore national issues in biotechnology. I welcome your comments below. ]
