Three hundred Takeda employees from the Japanese pharma giant’s California research center have been working from home for 10 days straight.
Neurocrine Biosciences, one of the few commercial-stage biotechs in town, is working to ensure the animals housed in its vivarium are appropriately minded.
Ciara Kennedy, CEO of clinical-stage antifungal therapy developer Amplyx, is facing a slowdown in trial enrollment as hospitals focus on handling the influx of pandemic patients.
Local biotech executives and investors shared snapshots of life sciences in the time of coronavirus Wednesday afternoon at Xconomy’s Xcelerating Life Sciences San Diego event. The program, originally slated to take place at Takeda California, in San Diego, was instead hosted in a place many of us are becoming ever more familiar with these days: cyberspace.
And although coronavirus wasn’t formally on the agenda for any of the fully digital event’s talks, its impact was raised in each of the panel discussions—an illustration of how the deadly virus is reshaping the lens through which many view today’s business and biotech worlds.
Panelists were united in anticipation of significant changes to the biotech sector. Still, it wasn’t entirely a chorus of doom and gloom.
Nancy Hong, a managing director at St. Louis-based, MO life sciences venture capital firm RiverVest, noted that notwithstanding the shuddering public markets, investment firms still have ample capital to deploy.
“I still think that for the right deals, they’re still going to need to get done,” said Hong, who helped open RiverVest’s San Diego office. “We try and [invest in] once-in-a-lifetime opportunities, and those are going to need to get done, and we have the capital, so they will get done. There’s just going to be a higher bar for companies that are raising right now, and the sense of urgency is going to die down.”
For biotechs Hong has spoken with, the situation remains fluid.
“Companies have been coming up with backup plans, but it’s changing daily,” she said. “I have one portfolio company that had contracts for manufacturing in China and they thought, oh, we should get some domestic backups. But at this point in the cycle, it feels like China might be back online, and we don’t know what is going to happen to the domestic manufacturers.”
Kim Kamdar, a partner at the San Diego healthcare venture capital firm Domain Associates, said the firm is pressing ahead with deals that were the works before the word “pandemic” irrevocably entered the mainstream lexicon.
“We were in the process of funding two companies while this was going on, and those are continuing to happen,” she said. “One is a new investment and other is a seed investment in neuroscience, where we’ll be looking to pull down a Series A financing here within the next couple of weeks.”
Still, “I do think overall I do think there will be a dramatic slowdown in the private markets due to the lack of liquidity in the public markets, or just actually the general lack of investor confidence,” Kamdar said. “Until we start to see some stabilization, I think it’s going to result in a pullback.”
Entrepreneurs in the Domain portfolio are being disciplined, with some pulling from experience they gained while wrestling their early-stage companies through the 2009 recession, she added.
“While this is a very different reason, a lot of the same kind of mindsets are being put in place,” she said.
From the perspective of the biotech entrepreneur, Amplyx’s Kennedy said she anticipates startups that need to raise fresh capital will find it a slower process than usual, which will make established relationships with trusted investors more valuable than ever.
“Plan, if you can, to put yourself in a position where you don’t have to raise capital, ideally for the rest of the year and maybe into next year,” she said. “If you can’t do that … there are times where you have to do a deal, even if you don’t like it, to keep going.”
At Amplyx, an unanticipated challenge will be keeping up the team’s motivation amid the struggle to keep its trials progressing apace, Kennedy said.
“The challenge we face is our physicians, our investigators, are infectious disease doctors or ICU doctors, and they are being pulled in a million directions,” she said. “We are expecting a slowdown in enrollment, and hopefully it will be as short-lived as possible, but we’re prepared for that.”
Neurocrine’s Kyle Gano, chief business development and strategy officer, said he’s also considering how best to ensure the company’s employees are able to continue doing good work. Neurocrine (NASDAQ: NBIX), which has commercialized two drugs, including one in partnership with AbbVie (NYSE: ABBV), anticipates having three treatments across four indications on the market by year’s end.
“It’s unrealistic for any of us to think what’s going on would not affect our thought process and how we run our business today and in the future,” Gano said. “That being said, we still have to run our business. We still have to encourage people, put them in the right environment to continue on delivering on the projects that they’re working on, and I think that’s going to be the hardest part here.”
Keeping a “focused, happy, and motivated” workforce in the face of major societal change, such as the unanticipated closing of schools, caused by the spread of coronavirus will be key to ensuring the work under way at Neurocrine progresses, rather than stalls, during the present tumult, Gano said.
“I think that’s where people should think about investing,” he said.
Zach Hornby, CEO of 25-person biotech Boundless Bio, says the San Diego-based preclinical precision oncology company has the advantage of being a small team in a relatively big lab space.
Those who perform essential lab work are still visiting the Boundless office, albeit under strict guidelines: Only one employee per lab bay at a time; no meetings—even one-on-ones; and any work that doesn’t need to take place in a lab, such as data analysis, must be done remotely.
“We are fortunate in that we are still able to operate and we do not have any binary risk associated with this disruption,” Hornby said. “At worst, there would only be an impact on timeline, but no experiments at risk.”
Evercore ISI’s Josh Schimmer, who moderated the event’s first panel, brought that session to an end with what he noted is becoming the signoff du jour: “Stay safe.”
Image: iStock/Conchi Martínez