Robert Coughlin: MassBio, creating a climate where innovation flourishes




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Video title: Robert Coughlin: MassBio, creating a climate where innovation flourishes
Released on: October 17, 2012. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed at BioPharm America in Boston, Fintan Walton talks to Bob Coughlin, CEO of MassBio
MassBio and growth of biotech companies in Massachusetts
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BioPharm America, in Boston, in September 2012. On this show I have Bob Coughlin, who is CEO of MassBio, welcome.
Robert K. Coughlin:
It's great to be here Fintan. Thank you for having me.
Fintan Walton:
Pleasure. Now MassBio obviously is the, the local organization for biotechnology companies here in Massachusetts, but also includes pharmaceutical companies if we may add. You run MassBio and you must have a very good, hopefully a good knowledge of what's actually going on here in Massachusetts, so what is going on?
Robert K. Coughlin:
Well you know Fintan things have been great, it's great to be here at BioPharm America and co-hosting this event with the EDB Group, it's a wonderful partnering event and partnering is what this conversation should be about. We've grown significantly in the last decade here in Massachusetts in the area of innovation, and jobs, and in companies. MassBio now we've represent over 650 biopharma companies and you know we are continuing to grow, continuing to grow and that's good news.
Fintan Walton:
And that's against a backdrop where there are people in the industry who may have a different view of what's going on in the pharmaceutical and biotech field in the sense that there is, there is a lot of redundancies being made by big pharma, there biotech is a little more difficult to fund, so against that environment why is Massachusetts able to hold it's own?
Robert K. Coughlin:
You know that's a great question, as we all know in the last five-years capital formation has became a huge issue for our industry, we've been able to take that bad situation and turn it into a positive, big pharma has changed their revenue model and what they have done is they've started to do deals, in-licensing, out-licensing, investing in those small nimble biotech companies they can advance research and accelerate innovation in a much more cost effective manner, that's how we have grown. We have grown 43% in employment in the last nine-years here in Massachusetts, if you look at the fact that there are company, like big pharma companies like Sanofi, and AZ, AstraZeneca, and Pfizer all of them are putting their research and development, and business development dollars here in Massachusetts and that's how we have grown.
Development of the Massachusetts biotechnology industry
Fintan Walton:
So lets just a little bit, just analyze that a little bit more because you know it's not just because it happens to be Massachusetts it's what's in the Massachusetts that's presumably helped to make that happen, so what is the magic ingredient then that makes Massachusetts attractive for growth?
Robert K. Coughlin:
You know it goes back too, it's a great point. If you look at the mission of MassBio is to create a climate so that innovation can really flourish. Now how do we do that? You do it with great policy from our partners in government, you do it with industry collaborating like we are here at this conference, but also you really have to look at academia, and academic medical centers and that's where it all starts here, if you look at the fact that we are you know home to the top five NIH funded hospitals in the country, I mean you can walk to all five where we are sitting right now.
Fintan Walton:
That's government funded, that's government funded?
Robert K. Coughlin:
That's government funding going to the best and brightest, people who are really focusing on the patients, people who are trying to come up with new therapies, new ideas, new diagnostics, new devices to treat sick people and we continue to win a disproportionate, when you go per capita and you look at the fact that you know Massachusetts received in 2011, two and a half billion dollars in NIH funding, I mean that's an amazing amount of money that government funds to do what, you know industry wouldn't do otherwise and that's where those great ideas come from, we work closely with the tech transfer offices from all of those academic medical centers in academic institutions, we represent places like Umass, Harvard, MIT, some small colleges in the neighborhood and that's where these companies actually are birthed.
Role of the government in capitalism
Fintan Walton:
So it's an interesting point, because you know not just only because Massachusetts in relation to the US but you know on a global scale Massachusetts sticks out, what we are really talking about here is how government can influence capitalism
Robert K. Coughlin:
Absolutely.
Fintan Walton:
in that sense because we've got, we've got, you talked about investment all investment comes from capital and capitalists which is really important for growing these businesses taking on those risks, but at the same time you have government playing a role. Now there is an election going on this year in the US obviously for President and there are different, views there, so you know where, which is the best place for biotech in terms of, not just biotech it's, what's the effect that biotech can have on healthcare in terms of patient ultimately getting cured, or treated for diseases, what's the balance that's needed between government and capitalism?
Robert K. Coughlin:
Well I think they go hand in hand, in other words we all know that inventing a drug is high risk business, so if government steps up with NIH funding to do research that otherwise nobody else would, you create enough ideas in concepts that you can turn into a business. And here in Massachusetts if you look at the fact that in 2011 we've received around 23% of the overall venture capital deals in biotech was done in Massachusetts, so it's really around was $0.43 on the dollar versus NIH funding. So government for every dollar they put in it enabled the venture capitalists, capitalists to put $0.43 on the dollar investment, it's a safer bet if then if we didn't have those investments, and where capital formation has been such a challenge it's important that we continue to have that climate so that these products can move down through the business cycle in a way that it doesn't take 10-years, and it doesn't take a billion dollars. When you talk about selling these drugs and providing access to patients they will be less expensive if they're not so costly to invent.
Fintan Walton:
Right.
Robert K. Coughlin:
And that's what we are trying to do.
Pharmaceuticals focus on sales and marketing in Massachusetts
Fintan Walton:
But isn't that what, that's been a historical problem, and it's been historical problem because everybody is just focused on lets get a drug to market, we have all these hurdles and we just got to leap higher, so what is happening here in Massachusetts that can change the way that allows drugs to be to get to market quicker that they are then ultimately cheaper?
Robert K. Coughlin:
Well there has been a huge shift, and you know I've always said that if a patient doesn't have access to a drug what's the sense of inventing it, okay. Someone's got to be the consumer, someone needs to benefit from it, we've made a huge shift in attitude locally in that we want these therapies to be part of the solution of the rising cost of healthcare, in other words if we're going to create a drug it needs to be provided to a patient and it's going to reduce the overall cost of healthcare. You know I have a son with cystic fibrosis and if there is a drug that will work for him which is very, very close, a local company here in Massachusetts it's come up with the first approved therapy that treats the underlying cause of cystic fibrosis those drugs will prevent all of the other symptoms that we need to treat as a result to cystic fibrosis, and ultimately a double lung transplant, a double lung transplant is a lot more expensive than taking a small molecule pill every day.
Role of government bodies in the biotech industry
Fintan Walton:
Sure, so where does that leave us, because the conundrum I suppose for the industry is getting that balance right where by we have enough innovation which is, I suppose set by what government can influence, and government can influence two things, it can influence amount of funding and that's amount of expenditure that goes into things like the NIH,
Robert K. Coughlin:
Absolutely.
Fintan Walton:
and healthcare, and so forth versus government legislation that enables companies to take those risks, enables the biotech companies to get the appropriate tax credits and so forth, so how the, how can the US government get that right, or has it got it right?
Robert K. Coughlin:
We are not there yet, but we are trying very hard. I mean at MassBio we have a Federal Action Plan, we have a presence down in Washington DC, as well as here on Beacon Hill, to have our state policy plan implemented, but when you look on a federal level we are probably one of the only industries that actually is an advocate for more funding for the federal agency that regulates us, we want more money for the FDA, meaning we want great people to stay at the FDA work there, we want some certainty and we want to know that we be able to get our products through the clinical trial process in an efficient manner. We want to make sure that there is NIH funding in the future, because if there isn't that brings uncertainty and there will not be a future pipeline of what we need to do to sustain capitalism in a healthy business. We also want to make sure that there is some sort of reimbursement there has to be access for patients. And under federal healthcare reform there is many people that are on Medicare, and Medicaid we want to make sure that there is reimbursement that is adequate so that we can continue to fuel the future innovations.
Prospects of biotech industry in next five-years
Fintan Walton:
Okay. So if, Bob when you look at where we are now and where you would like to see the industry, lets say in the next three to four-years, what things would you like to see change that will enable you know our industry to continue the growth its had at least here locally and to reach that vision that we all look for which is a you know really effective, productive, efficient, ability to produce drugs?
Robert K. Coughlin:
I said earlier that we were able to capitalize and turn the capital formation crisis into an opportunity locally, because big pharma has utilized us as their feeding ground or their pool for future innovations. I am worried that's not going to be sustainable, we haven't had too many IPOs as you know in the last five-years it's starting to come back, some of the most successful IPOs have been here locally, but it's not enough. If I could have one wish come true would be that Wall Street will come back and the economy will come back. When you look at the fact that we haven't been able to raise public money the way we would have liked it diminishes the value to do deals, you know the valuation with large pharma companies. So obviously we want certainty, we want stability, economy stability, we want Wall Street to come back and we also want stability in government with the NIH, with the FDA and with reimbursement.
Fintan Walton:
Bob Coughlin, thank you very much indeed for coming on the show.
Robert K. Coughlin:
It's great to be here. Thank you for having me and I look forward to seeing you next year.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Robert K Coughlin
President and CEO
At the time of this PTV interview Robert K. Coughlin serves as President and CEO of Massachusetts Biotechnology Council. As President and CEO of the Massachusetts Biotechnology Council, Bob's mission is to foster a positive environment that enables each biotechnology company to achieve its full potential in Massachusetts, making the state a world center for biotechnology. He is very familiar with all areas of the Massachusetts life sciences super cluster and is a passionate advocate for research and the biotechnology community. Bobhas spent his career in both the public and private sectors, most recently serving as Undersecretary of Economic Development within Governor Deval Patrick's administration in 2007. Prior to that, he was elected as State Representative to the 11th Norfolk district for three terms. In the legislature both healthcare and economic development were his priorities. In the world of business he specialized in the environmental services industry and moved on to capital management and venture capital. He has held senior executive positions in both fields. He is a graduate of the Massachusetts Maritime Academy where he majored in Marine Engineering, and is a Lieutenant in the United States Naval Reserve. Coughlinhas also been active in the community, having served on the boards of the Massachusetts Maritime Academy and Beth Israel Deaconess Hospital. He has served as the honorary chairman of the Great Strides Cystic Fibrosis Walk since 1996. In 2009, he co-chaired the Children's Hospital Boston signature event, Champions for Children's.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialization.
Massachusetts Biotechnology Council
The Massachusetts Biotechnology Council is an association of more than 600 biotechnology companies, universities, academic institutions and others dedicated to advancing cutting edge research. We are the leading advocate for the Bay State's world premier life sciences cluster. We drive innovation by creating a forum for the biotechnology community to come together, educating the public and policy makers, influencing public policy and advancing the economic interests of individual companies, as well as the sector as a whole.