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Assessing the history and value of Human Genome Sciences
Laura M. McNamee, Fred D Ledley
Abstract
Human Genome Science (HGS) aspired to dominate the emergent field of genomics by discovering expressed gene sequences and developing therapeutic and diagnostic products based on proprietary genes. While HGS’ accomplishments fell short of their own lofty expectations, by the time HGS was acquired by GlaxoSmithKline, the company had extensive intellectual property and had launched a product with >$1 billion market potential. Nevertheless, HGS’ acquisition price was less than the total capital investments in the company. This work examines HGS’ history and accomplishments in the context of the business plan described by the company at their IPO. We focus specifically on the company’s valuation over time, which was highly correlated with general market indices, but negatively correlated with metrics of technical or clinical progress. The history of HGS points to the challenge of accounting for the value created by a science-based business plan. Earnings-based metrics, present value calculations, and “fair value” assessments did not account for HGS’ progress in executing their stated business plan. This work highlights the critical need for accounting practices that credit value to the progress of translational science and enable investors to profit from such investments.
On a recent press tour of the Berlin and Saxony region I came across something I wasn’t expecting. Germany has instituted a set of very progressive (or, aggressive) policies to phase out nuclear and carbon-based energy in favor of renewable sources. I saw a lot of interesting wind, solar, and other projects (more on these later), but also saw something I really wasn’t expecting — a large group of Libyan engineers learning about these renewable energy sources and how to integrate them with existing power grids.
My immediate question was “why would an oil-rich country like Libya be interested in developing renewable energy?” The answers were illuminating.
“We only have 50 years of oil left” was the first answer. With the Libyan political system currently in turmoil, it is impressive that there are stakeholders looking for sustainable means to promote stability. Much support comes from EU funding to North African nations to supply renewable energy to proximal member states such as Spain and Italy. It is worth noting that the potential for solar, and likely wind energy, in Libya far exceeds the oil resources–Germany has made great investments in solar energy, but they are limited by solar exposure similar to that of Alaska. North African countries have longer photoperiods with less seasonality, and less cloud cover. The large unpopulated areas also mean fewer siting problems (and great opportunities for economic development outside urban areas).
Another rationale presented is that oil resources are currently used to generate electricity in Libya. Finding alternative means to produce electricity can increase the amount of oil that Libya can sell, ultimately improving the country’s wealth. Furthermore, great efforts are necessary to ensure that remote habitations are supplied with electricity. Setting up independent power grids can avoid long, lossy, runs of electricity.
A final rationale is that production of energy from non-oil resources holds the potential to decrease the political power of foreign oil extraction firms.
I will follow up in a future with more on my general observations and thoughts on Germany’s energy policies.
This paper is part of the free Open Access archive of the Journal of Commercial Biotechnology
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ABSTRACT: The research community, particularly in academic and public sector institutions, recognises that scientists have an obligation to publish the results of their research and otherwise make available data or unique materials that are necessary for others to replicate or advance their research. Over the past 15 years, the US National Institutes of Health (NIH) has developed policies to make such obligations a requirement for recipients of NIH funding...
The Journal of Commercial Biotechnology is a unique forum for all those involved in biotechnology commercialization to present, share, and explore new ideas, latest thinking and best practices, making it an indispensable guide for those developing projects and careers within this fast moving field.
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For more information, see the Journal of Commercial Biotechnology website
This paper is part of the free Open Access archive of the Journal of Commercial Biotechnology
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ABSTRACT: The unparalleled growth of commercial biotechnology in the USA and Europe during the past two decades has also been marked by its steady development in Latin America. Brazil, Cuba, Argentina, Chile, Mexico and others have made significant strides in building their research and production capacity in modern biotechnology...
The Journal of Commercial Biotechnology is a unique forum for all those involved in biotechnology commercialization to present, share, and explore new ideas, latest thinking and best practices, making it an indispensable guide for those developing projects and careers within this fast moving field.
Each issue publishes peer-reviewed, authoritative, cutting-edge articles written by the leading practitioners and researchers in the field, addressing topics such as:
- Management
- Policy
- Finance
- Law
- Regulation
- Bioethics
For more information, see the Journal of Commercial Biotechnology website
This chart shows the companies with the successful drug patent challenges from last year.
The most successful drug patent challengers in 2012 were Mylan Pharms Inc, Lupin Pharms, Ivax Sub Teva Pharms, Teva Pharms, Perrigo Israel, Teva, Watson Labs Inc Fl, Dr Reddys Labs Ltd, Innopharma Inc, and Mylan Labs.
For more infographics, see the DrugPatentWatch Pharmaceutical Innovation Infographics.
Do you have a response to this infographic? Respond in the comments section below.
I will be helping judge the AUTM Venture Forum again this year. The competition features a $10,000 prize for the first-place startup company, and valuable guidance and exposure for all entrants.
Full details on eligibility and benefits are at http://autmventure2014.istart.org/. The deadline for submissions is September 30, 2013.
This guest post is from the BiotechBlog Intern, Fintan Burke. Fintan is a student at the School of Biotechnology at Dublin City University. Do you have a response to Fintan’s post? Respond in the comments section below.
For many, the PhD is not what it once was.
A problem academic institutions and industries are now facing is addressing the “massification” of PhD graduates; too many people are earning qualifications for roles that do not exist. A report from the Danish think tank DRUID reporting on post-doctorate career behaviour from a research orientated college found that job security is uncertain at best. Those who stay in the realm of academic/public research have their training valued and are promoted internally, but suffer from having a narrower scope of training for what has become a market of fixed term, non permanent positions.
These frustrations are echoed in the US. A 2007 Chronicle of Higher Education article notes this behaviour is beginning to drive people away from seeking positions in science. The Nature article “Indentured Labour” paints a poor picture: tenure-track positions remained at a constant level in the twenty years it took for the number of doctoral degrees awarded to double. People receiving their first National Institute of Health (NIH) grants are now in their early forties compared to those in their mid-30s being awarded grants in the 1970s. In short, the traditional academic career path is bottlenecking at an increasingly fast pace.
Anne Forde of Cambridge University’s careers service initially started out as a researcher in German Cancer Research Center before making the move to journalism, writing and later editing the Science Careers magazine. She says students are becoming increasingly aware of the realities of the modern job market.
“The research councils in the UK estimates that maybe only 1 in 10 PhDs students will end up in a long term 10 year academic post, so it’s not a minority issue to look at careers outside academia. So there is a lot of interest in looking at a broader career options because there are very few people who could say that they would be guaranteed a long term independent post in academia. We’ve always had a service for PhD students but there is an increasingly high demand for information and for guidance about careers outside the classic academic careers.”
“They probably aren’t aware of how complex the career choices or trajectories are or how much it isn’t a guarantee. And there’s a lot of mixed messages; the government is saying we need more scientist PhDs and we need more engineers for the economy, but the reality for somebody who is a PhD graduate is that the job market is still challenging. Unemployment rates for PhDs are in these cases low, but that doesn’t mean people are getting exactly the jobs they want at the right time and I think most students have to put in the effort to get the type of career they want. It’s difficult to get the message across that it’s not quite that straightforward; it is an area that needs, I think, addressing.”
The lateral move in life sciences is certainly not new, but signs of its encouragement are growing. A recent UK government report highlighted the “valley of death” phenomena that can occur between academia and industry; new applications have a more staggered path towards reaching industry due to the lack of expertise available for bridging such applications to market.
Perhaps this is down to the simple fact the passions and attitudes of researchers may simply not compel them to take up a business role. Deciding on such a drastic career change, where an entire new skill and knowledge set is required – alongside extra time commitments – can appear daunting to even the most experienced researcher. Fortunately, organisations such as ecosvc.com exist which go towards educating scientists to properly engage in turning their patents into financially sound business proposals. Even traditional research funding bodies are offering assistance to new companies, such as the NIH’s Commercialisation Assistance Program and the dedicated Biomedical Catalyst Scheme.
This movement between science and industry is a two way street. John Boyle left his managerial position in the pharmaceutical industry for what he terms as the “satisfying chaos” of academic research. Unlike researchers moving to business, immersing himself in “diverse, cutting-edge research problems” had tremendous appeal. Moving back to research also revealed to him surprising inefficiencies – seeing that people were expected to self-organise for research groups was “frustrating”, though his experience in management helped when given the responsibility for handling multiple, constantly changing projects. He also admits, however, that enforcing business-like process to the accepted research routine was met with more inefficiency and often hostility.
Finally, numerous examples exist of those whose experience initially lay in the ivory towers of business and academia going into other, tertiary science careers. As Anne Forde explains, the move into these initially unconventional fields has lost the negative stigma at the postgraduate level. “Traditionally they put a lot of their own funding into training PhDs and post-docs to be good at academic research. I think faced with the reality of how the academic job market is the majority of lecturers I have met do realise that many of their PhD students will have to look outside academia. They’re, in many cases, supportive of that and they try and help facilitate their student’s career transitions and often they have peers in other professions themselves.” This is once again reflected at an institutional level, with fellowships at the American Association for the Advancement of Science encouraging scientists who choose to go into science policy and communication and communication internship programs at the National Cancer Institute, to name but two.
About the author:
Fintan Burke is a student at the School of Biotechnology at Dublin City University. His main fields of interest include biomedical therapies and recombinant organisms. Fintan may be contacted at fintan.burke2@mail.dcu.ie .
This paper is part of the free Open Access archive of the Journal of Commercial Biotechnology
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ABSTRACT: 1st May, 2004, saw the national implementation of the EU Clinical Trials Directive (2001/20 EEC). Additionally, Europe changed from 15 to 25 member states, all implementing the Directive nationally at the same time and all being affected by the many and varied aspects covered in the Directive. The paper looks at the new changes to European clinical trials and what this will mean for the pharmaceutical industry and research academia alike, especially in relation to safety reporting and risk/benefit assessments.
The Journal of Commercial Biotechnology is a unique forum for all those involved in biotechnology commercialization to present, share, and explore new ideas, latest thinking and best practices, making it an indispensable guide for those developing projects and careers within this fast moving field.
Each issue publishes peer-reviewed, authoritative, cutting-edge articles written by the leading practitioners and researchers in the field, addressing topics such as:
- Management
- Policy
- Finance
- Law
- Regulation
- Bioethics
For more information, see the Journal of Commercial Biotechnology website
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