Open Plenary: Opportunities created by a bear market — There IS a silver lining

By Dylan Kissane

BIO-Europe’s first in-person Plenary Panel session since the COVID-19 pandemic was interrupted by a fire alarm, leaving much unsaid. But what was discussed provided plenty of food for thought for the hundreds in attendance.

Moderator Hubert Birner of TVM Capital began by asking Stephanie Leouzon, Partner and Head of Torreya Europe, to offer a macro-level assessment of the state of the biopharma industry. Leouzon argued that while the fundamentals are solid, the industry faces significant issues. Some of these issues are common to all sectors, including inflation, rising interest rates, and the conflict in Ukraine, but their impact on the life sciences is marked. Biotech valuations are now down 70% from their peak in February 2021, IPO volumes are down globally and virtually non-existent in Europe, and even if M&A volumes are up, the value of those deals has plunged.

Despite these economic storm clouds, panelists are convinced that there remains a silver lining for the biopharma industry. Sander Slootweg, Managing Partner at VC firm Forbion, argued that “this is the century of biotech” and that if the required capital remains available, innovation in biotechnology will continue. Markets will constantly shift, and interest rates will always go up and down, he said. Still, if sufficient capital is allocated to innovative science and existing stakeholders continue to support their investments, the sector will continue to flourish.

Christian Rommel of Bayer agreed and pointed to the need for firms like his to partner with biotechs. More than half of the most innovative new treatments are the result of partnerships between pharma companies and biotechs, he said, and these partnerships are leading to the most productive biopharma industry in history. He argued that the era of biotechs competing with pharma companies is over, and this is the true silver lining for him.

Panelist Werner Lanthaler also highlighted this evolution in the biopharma. The CEO of Evotec argued that the industry must demonstrate that it can learn and that going back to doing things the way they have always been done would be the worst mistake the sector could make. The future will not resemble the past, he said, and pricing and markets will look entirely different five to ten years into the future. As a result, there is a need to embrace new technologies and do all that can be done to avoid falling back into a world of silos. The panel ended abruptly as a fire alarm rang out in the conference room in Leipzig, but the industry’s confidence on show suggests that the sector itself had little to fear from the sirens.