The biopharmaceutical industry has long been an attractive sector for investors seeking high potential returns and advancements in healthcare. However, navigating the complex landscape of biopharma investments requires a deep understanding of trends, challenges, and regulatory environments. To shed light on these critical aspects, a panel of esteemed industry experts convened at the Global Biopharma Cross-border Summit 2023 held in New York City on May 16th, 2023.  

Event Details: 

The Global Biopharma Cross-border Summit 2023, co-hosted by PwC, MSQ Ventures, and BioKatalyst Corporation, took place on May 16th, 2023, at 300 Madison Avenue, NYC. The event brought together industry professionals, investors, and supporting organizations, including The BayHelix Group and BioAroundWorld, to discuss the latest trends and challenges in the biopharma investment landscape. 

Panel Discussion: Where are the Biopharma Investment Bucks Going 

Moderator: MaryJane Rafii – Venture Partner, MSQ Ventures  
Panel Speakers:  
Ingrid Yin - Co-Founder, Managing Partner, Portfolio Manager, MayTech Global Investments  
Doug Giordano – Managing Director, Perceptive Advisors  
Echo Hindle-Yang – CEO & Founder, MSQ Ventures  
Seamus (Yonghua) Jiang – Managing Director, PwC 

The panel discussion focused on the current trends and destinations of biopharma investments. The speakers provided valuable insights into the factors influencing investment decisions and the challenges faced in the industry. 

Cross-Border Transactions and Regulatory Challenges 

The panelists delved into the challenges surrounding cross-border transactions, particularly in the context of China. MaryJane Rafii emphasized the regulatory hurdles that hinder the implementation of disruptive scientific advancements in the Chinese pharmaceutical industry. China's volume-based pricing policies were identified as a major driver of quality manufacturing and compliance issues. Seamus (Yonghua) Jiang highlighted the need for major pharmaceutical companies to invest in China, supporting local manufacturers in overcoming these challenges while ensuring adherence to global standards.  

Access to Medicines and Market Dynamics 

The discussion revolved around the critical issue of access to medicines, both in China and the global market. Doug Giordano stressed the importance of improving access to high-quality medicines by producing quality generics, reducing prices, eliminating excessive profits, and driving real innovation. The panel acknowledged the diverse perspectives within the market, and Echo Hindle-Yang pointed out that a Chinese company's interest in acquiring the rights to a drug demonstrates their confidence in the product's potential. This indicated the evolving market dynamics and the growing importance of differentiation and distinctiveness in China's biopharma landscape. 

Two-Way Flow of Transactions and Selective Investments 

The panelists examined the two-way flow of transactions between China and the United States. Echo Hindle-Yang highlighted the increasing trend of Chinese biopharma companies seeking licensing agreements for innovative drugs, indicating their willingness to invest and diversify their portfolios. On the other hand, Seamus (Yonghua) Jiang raised concerns about liquidity bubbles and diverging valuations in the private market. The panel emphasized the need for strategies and selection criteria to navigate the evolving investment landscape successfully. Doug Giordano highlighted Perceptive's selective approach to investments, underscoring the significance of thorough analysis and due diligence. 

Exit Opportunities, Mergers and Acquisitions, and the IPO Market 

The panel delved into the challenges associated with exit opportunities and explored the future of mergers and acquisitions (M&A) and the IPO market. Seamus (Yonghua) Jiang emphasized the importance of differentiation and finding the right buyer, given the current market conditions. Doug Giordano shed light on the significance of understanding market cycles and intrinsic value in making investment decisions. Echo Hindle-Yang provided updates on the IPO market, which experienced a decline in biotech IPO activity but showed signs of recovery. The panelists recognized the need for careful consideration of market trends and individual company profiles when evaluating exit strategies. 

Returns, Exits, and Regulatory Landscape 

Ingrid Yin, shared valuable insights into demonstrating returns, exits, and positive outcomes in the current market. She emphasized the importance of building trust and presenting a convincing case for future returns to attract more investors. The panelists engaged in a comprehensive discussion on the future trend of M&A activity and IPOs. Seamus (Yonghua) Jiang predicted a robust M&A pipeline in the coming months, while Doug Giordano provided insights into the consolidation challenges faced by biotech companies of different sizes. The panel also cautioned investors about the challenges faced by unprofitable biotech companies and the need for substantial investment and market demand for their products to succeed. 

The panel discussion provided valuable insights into the trends and challenges within the biopharma investment landscape. The panelists emphasized the importance of strategic portfolio management, understanding market cycles, and considering regulatory environments when making investment decisions. The discussions highlighted the growing interest of Chinese biopharma companies in global partnerships and the need for collaboration to drive scientific advancements while navigating regulatory complexities. 

Investors and industry professionals attending the summit gained valuable insights into the biopharma investment landscape, enabling them to make informed decisions and contribute to the advancement of healthcare. 

Panel Discussion 2: Emerging Opportunities in China Cross-border Collaborations 

Moderator: Marc Estigarribia – Managing Director, MSQ Ventures  
Panel Speakers:  
Brianne Jahn – CBO, LianBio  
Samuel Zhang, PhD, MBA – CBO, Gracell Biotechnologies  
David Gilman – CBO, ADC Therapeutics  
Wenseng "Wendy" Pan – Partner, Goodwin 

Valuation and its Impact on Deal Making 

The panel began the discussion by addressing the topic of valuation in the current market environment compared to previous deal rounds and licensing deals. Wendy Pan emphasized that valuation is subjective and influenced by factors such as leverage, supporting data, and senior executives' management style. She noted that prioritizing deal closure may lead to accepting a lower valuation, while companies with less urgency can demand more favorable terms. 

Brianne Jahn highlighted a recent shift towards earlier stage deals and a potential decrease in overall deal costs. However, she emphasized that the fundamental factors of commercial potential and R&D investment continue to play a central role in valuation approaches. Companies with lower market caps may be more willing to accept favorable terms due to market conditions and the need for non-dilutive capital. 

David Gilman stressed the importance of consistency in valuation approaches and noted that companies with financial stability are engaging in deal activities and scientific collaborations, particularly in the early preclinical stages. He emphasized the opportunity to stabilize the market and manage cash flow while focusing on building in the late preclinical arena. 

Dr. Samuel Zhang discussed how asset valuation in the pharmaceutical industry involves negotiation skills and considerations such as interest rates, regulatory environment, and clinical development timelines. He highlighted that late-stage and early-stage assets are valued differently, with late-stage assets having clearer commercial potential. Bargaining power during negotiations depends on asset importance and the number of interested parties. 

Methodology for Assessing Assets and Deal Opportunities 

The panel then explored the impact of differing perspectives on market size and pricing on asset assessment and deal evaluation methodologies. Brianne Jahn shared that their approach remains consistent, focusing on integrating China into global trials to reduce R&D budgets and accelerate global or US approval. They prioritize seeking or sharing proof-of-concept (POC) data in phase three trials with hundreds of patients. 

David Gilman discussed how their transactional attitudes towards China have evolved over time, with a focus on finding capable and motivated clinical development partners.  

Wendy Pan shared her experience with US biotech companies seeking access to Chinese patients to expedite clinical trials in the US. She emphasized the value beyond monetary gain and upfront benefits, enabling faster clinical development and approval timelines. 

Dr. Samuel Zhang highlighted the value of discovery and the potential for faster cell therapy clinical development and approval timelines in China. He argued that China offers not only initial approval in the relapsed refractory setting but also access to a larger and more profitable market. 

Emerging Opportunities in China Cross-border Collaborations 

The panel discussion shed light on the evolving landscape of China cross-border collaborations. It highlighted the importance of consistent valuation approaches, integration of China into global trials, finding capable clinical development partners, and the value of accessing the Chinese market for expedited clinical development. 

In conclusion, the panelists agreed that valuing biopharma assets and assessing deal opportunities require careful consideration of multiple factors. The methodologies used may vary, but fundamental factors such as commercial potential, R&D investment, negotiation skills, and market conditions continue to play important roles in determining valuations. 

After the second panel, the event was concluded by presentations of Dr. Joan Fallon – CEO, Curemark, LLC, Hugh Davis - COO & President, Biosion,  Jack Wu, PhD, MBA - BD Search Evaluation, Antengene, Sanjay Zaveri - SVP Business Development, PDS Biotechnology