Bigtime Biotech Thinkers Steven Burrill and Gary Pisano Agree on Bright Future of Industry, Disagree on How to Build Value

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poised to solve some of the largest global problems of today such as climate change, water and food shortages, the energy crisis, and healthcare. “It’s a fabulous time to be part of this industry and a fabulous time to be part of the development of these sciences,” he said. The bad news is that the business strategies that enabled Amgen and Genentech to prosper do not provide a model for success to startups.

“If you did what we did over the last 30 or 40 years, you would fail today,” Burrill said.

The biotech industry is reeling at the moment from the downward pressure on the price of their drugs expected because of healthcare reform in the U.S. and competition from biogenerics. Biotechs need to do a better job of integrating their drug discovery technologies and expertise in multiple disciplines to lower their risks of failure in delivering products to the market, Pisano said. His concern is that the industry has previously built individual firms around single ideas more often than taking that idea to an existing company with the infrastructure in place to turn it into a profitable product.

“Every idea gets its own firm,” Pisano said. “My concern is a firm is a pretty expensive envelope to wrap an idea in.” The Harvard professor also advocated a business model in which smaller firms stay independent while plugged into a larger network of academic and commercial entities to leverage outside knowledge and resources. (There are several examples of more integrated business models adopted by life sciences startups that are incubated in labs, owned by larger companies such as Pfizer and Cambridge, MA-based Biogen Idec (NASDAQ:BIIB), where they reduce their overhead expenses by sharing equipment and other resources yet maintain core teams that work on their own products like traditional startups do.)

Both Burrill and Pisano are leading minds in biotech, but I thought that the picture that Burrill painted of the future of healthcare was particularly visionary. “I have a somewhat BlackBerry-centric view of what healthcare will be in 2020,” Burrill said. “In 2020, most of healthcare is going to be you or I spitting on a chip that gets put in a cell phone or a BlackBerry, which, much like a GPS system, is going to send information up to the magic computer system in the sky to analyze it and it’s going to be predictive of what’s going to happen to me. Healthcare is going to become an information-centric business driven off a confluence of technology that’s going to change everything.”

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4 responses to “Bigtime Biotech Thinkers Steven Burrill and Gary Pisano Agree on Bright Future of Industry, Disagree on How to Build Value”

  1. I definitely agree that the transition from a new drug to a diagnostically (preventative medicine) driven business model is inevitable. We are already seeing those changes by the investments companies such as Affymetrix are making in disease specific diagnostic gene array platforms.

    My issue is what new eduction platforms are going to be needed to support this change in Health care strategy?

    Would venture capital investment in developing training and education models, provide an avenue? Particularly for those companies with compromised cash follows.

    The fact that there are so few opportunities for the broader community to interact with these advanced technologies, much less understand them, mitigates against the long term viability of the current biotech business model.

    In addition, since the health insurance platforms will also be changed, providing education solutions at the payer/payee levels will become more of a premium over the next decade.

    Any comments?