Big Pharma has maintained radio silence since Avalon Ventures’ Kevin Kinsella launched a verbal attack last month on what he called the industry’s “predatory business practices,” saying they are doing “enormous damage to the life sciences venture capital ecosystem.” The San Diego biotech investor, in an exclusive interview with Xconomy, argued that pharma’s brass-knuckled M&A tactics are pushing life science ventures “almost to the point of extinction.”
In San Diego, Kinsella’s throwdown prompted the San Diego Venture Group to organize an April 19 debate over the merits of the longtime investment model for life sciences startups. The local venture group recruited Canaan Partners’ Wende Hutton and Versant Ventures’ Camille Samuels to make the affirmative argument for equity investing in biotech, while Avalon’s Kinsella and Frazier Healthcare’s Robert More will take the “con” side of the question.
Kinsella’s critique also hit a nerve on the far side of the world—felt by Antoine Papiernik, a managing partner in the Paris offices of Sofinnova Partners, established in 1972 as the first venture capital firm in France. Of L’Affair Kinsella, or perhaps Le Provocateur Kinsella, Papiernik told me recently via Skype, “One should not accuse the other, finger-point, [saying], ‘It’s you, the pharma, who is destroying the biotech industry.’ Bullshit.”
Sacrebleu! Such words.
Papiernik says Kinsella might have good reasons for his tirade. But the French VC contends the pharmaceutical industry’s bargain-hunting strategy is predictable, given the incredibly weakened state of biotechs and their venture backers today. And he says you can’t blame that on Big Pharma.
What follows is a transcript of our conversation, which has been condensed and edited for clarity:
Antoine Papiernik: [Kinsella] is blaming the pharma industry for something that, well OK, maybe something [was] coming from pharma. But I see it mainly as a rapport de force, a balance of power, and the balance of power has been skewed in favor of pharma.
At the same time, if you think back over the past 15 years, our business is much, much better. As a venture capitalist backing biotech companies, I say it’s much better than it ever was. We have the proof in the pudding. We can say that we have managed to bring NDAs [new drug applications], new products, to the market, things that pharma has been very poor in doing.
So, “A,” we have been incredibly successful as an industry, [especially] if you look at things in comparison with pharma. And “B,” and most importantly in the last 15 years, the pharma [industry] has totally, totally been reshaped. Look at Pfizer today, this is just humongous change among
