MassBio: Robert Coughlin on Policy, Investment, Acquisitions and the Future of Biotechnology




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Video title: MassBio: Robert Coughlin on Policy, Investment, Acquisitions and the Future of Biotechnology
Released on: October 28, 2010. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks with Robert Coughlin, President and CEO, about the the functions of MassBio. They discuss:

• Role of MassBio in policy environment

• Relationship with Bio

• How did the healthcare reform affect the members of MassBio?

• Working with FDA

• Economic crisis and changes in investments

• Is acquisition of local companies by large international pharma companies a good thing for MassBio?

• Future of Biotechnology industry and challenges for MassBio
Functions of MassBio
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BioPharm America in Boston. On this show I have Robert Coughlin, who is CEO of the Massachusetts Biotechnology Council otherwise known as MassBio, welcome to the show.
Robert Coughlin:
It's great to be here Fintan Walton, thank you.
Fintan Walton:
What is the function of MassBio?
Robert Coughlin:
Well our mission statement is clear, mission of MassBio is to create an environment in which all biopharma companies can achieve their upmost potential fairly general when you think about the companies and we represent well over 600 companies today. We represent the smallest of the small, the two person biotech company that just recently raised a small round of finance all the way to the biggest of the biopharma's and all of the large pharma companies and members of the trade association as well. So we need to provide services to help them succeed the big companies policy is very important, the smaller companies very important that we help them with their business needs, their innovation services, their economic development and their purchasing, so we try to do all of that for all of our member companies and we also have a communication strategy to educate the public as to what the definition of biotechnology really is? Why it's important to the economy? Why it's important to the patient population.
Role of MassBio in policy environment
Fintan Walton:
So in other words you are working on behalf of those organizations obviously, but helping to create the environment and lot of that is the policy environment, the political environment that allows innovation to get to the market ultimately and to overcome the disease states that are still out there, so how do you do that? How does an organization like MassBio actually go out and change policy?
Robert Coughlin:
Well the way we do it is by identifying stakeholders, finding out what their role should be and then getting them to do it, it's like the three legs of the stool. If you look at where this industry came from here in Massachusetts it's because folks from other countries and other parts of the country and other many parts of the world will come here to find out how we did it, well this industry was invented from academia, smart people at these worldrenowned academic institutions and academic medical centres we're home to 8 of the top 11 NIH funded hospitals or research institutions in the country. So these smart people from the Harvard MIT working with folks at MassGeneral and Children's Hospital and New Mass and Tufts they would come up with these ideas then you introduce an extremely risky bold venture capital community that was willing to take that risk and invest that capital to get these products all the way from the bench down to the bedside to the patient population, so now you look at it you have one stool as academia, the other stool is this new industry that's created and then the third leg of the stool is government policy, regulatory, authority sort of speak. In order to succeed all three of those folks need to do what they need to do academia keep putting out a world class work force, industry get together and identify what it is that you need for business and regulatory needs as well as future workforce and government has finally stepped up in Massachusetts to do their part to create an environment from a political standpoint so that these companies can succeed.
Relationship with Bio
Fintan Walton:
Right, so where does MassBio fit in relation to for an example BIO which is you know US wide are you working at advocacy level just at the state level or also you hitting Washington as well?
Robert Coughlin:
Yes, that's a great question Fintan Walton and I have spent majority a great amount of my time down Washington for the last two years because of the federal healthcare reform action that has been taking place and we wanted to make sure that we educate our federal delegations, because this is really grassroots politics, it's important that the Congress man and the Senators from Massachusetts understood not only how important this is to our local economy but to the patient population, so we have a federal action plan and we work on that diligently. We also have a state policy team that will work on the local state issues here in Massachusetts they are responsible for implementing with Governor Deval Patrick the first life science initiative which is a billion dollar initiative here in Massachusetts to keep these companies moving down the path of success during this capital formation crisis, but yes it's where we fit into Bio, Bio is more of a Washington DC based lobbying organization we are more grass roots and we like to bring the disease foundations in with us as well so that we can educate members of Congress that may not have a robust biotech industry in their district because they certainly have a lot of sick people that live in their district.
How did the healthcare reform affect the members of MassBio?
Fintan Walton:
Sure and the other key thing here is the recent healthcare reform that's taking place here in the US, so what's your view on that and has that been is that the good comprise that it should have been or how does it affect your members? How is that healthcare reform affect the members of MassBio?
Robert Coughlin:
Well if healthcare reform was not done properly biotechnology not only in Massachusetts but in the country could have gone out of business overnight and that's tragic, it's not just tragic for industry and jobs it's tragic for those who are experiencing unmet medical needs illness around the world, because that's what this industry does it creates secures, it creates tomorrows, it creates therapies that actually can drive down the cost of healthcare. A huge concern in federal healthcare reform was the issue around a reasonable pathway to biosimilars also known as biogenerics, if our member companies did not get a reasonable period of data exclusivity they own the rights to make their drug for X amount of time, this industry would go out of business because people would not be incentivized to invest in innovation, people don't realize a cost in average of a billion dollars and takes 10-years to get a product from the bench all the way to the bedside and into a patient that's a lot of investment dollars before you have something to sell and it's important that we preserve that.
Working with FDA
Fintan Walton:
Right, and in that respect then there is the regulatory issues, we've talked about regulatory issues at the FDA level and there is regulatory issues that relate to venture capital and how companies or venture capital organizations that take on risk continues to take on that risk, so is that those areas that we've talked about the Washington policy do you work at FDA level Washington policy as well?
Robert Coughlin:
Absolutely.
Fintan Walton:
Looking ways in which the FDA can be more realistic about how products can get actually registered?
Robert Coughlin:
Yes it's a great point, in fact the BioPharm industry biopharma industry I think we might be the only industry that actually advocates in lobbies for more money and more resources for the federal regulatory agency that oversees us, and the reason that is is because we would never want to comprise efficacy or safety and the people at the FDA do good work they just need to be able to do it more efficiently, quicker and continue to do the good work and if you can take that 10 years and a billion dollars to invent a drug and drive it down to five years and half a billion dollars the cost to invent will be less, the cost to recoup the investment will be less, the cost of drugs will be less, you know people will often say well drugs are too expensive, then I say yes well they are too expensive to invent let's get to the route of the problem and then we can go help these sick people.
Economic crisis and changes in investments
Fintan Walton:
Right, so in the end when it comes down to things like venture capital and we've just gone through a tough period clearly with the economic crisis that's not just here at the US but worldwide, what needs to change there that will continue to attract the risks dollars that are required to go into that investment that you've talked about?
Robert Coughlin:
We often say here in Massachusetts you know to use a sports analogy in baseball you got to keep your eye on the ball, we need to keep our eye on innovation, if we continue to put out the best work force we will continue to have the brightest, brightest and best ideas good ideas even during these very difficult times have been continuing to get funded, and what we have also seen with the dip in Wall Street and the lack of IPOs if you were big pharma is taking their business development dollars and investing them into our member companies that are smaller to keep their own pipeline our future blockbuster therapies robust and we have continued to experience growth at 43% in the last nine years here locally, we've made it through the tough times, the tough financial economic climate and we've done that through partnering events like you are here at BioPharm America here in Boston, today MassBio has partnered with the EBD group to do that and what we are doing is bringing buyers and sellers together.
Is acquisition of local companies by large international pharma companies a good thing for MassBio?
Fintan Walton:
Right, and when a company like a local company like Genzyme is a potential target for takeover is that a good thing for MassBio?
Robert Coughlin:
That has been the most popular question that I have received in the last several weeks and I am gonna give you my most diplomatic response. When you look at the biotech industry I mean we are adolescent we are growing up, we've been around for 25 years and these large biotech companies they have products that have gone to the market you know biopharma companies you look at the big pharmaceutical industry, the traditional pharmaceutical industry they are experiencing a role up on their own that's natural in business, so I like to tell people that what's happening with large international pharma companies acquiring our home grown large bio companies it's natural, it makes sense. And for us we've seen historically with companies like Takeda coming in and buying Millennium [PharmaDeals ID = 30116] it's only benefiting the amount of innovation coming out of this area the companies have increased their employment here, Sanofi-Aventis announced just a few weeks back that they are making Boston their worldwide headquarters for oncology research that's a good thing, Novartis a few years back put their worldwide research centre here, so we are finding that when investments are made and Shire acquired Transkaryotic Therapies [PharmaDeals ID = 20174], Sepracor [PharmaDeals ID = 33816] is acquired as well, this it's been a positive experience. So I would think that whatever direction Genzyme goes and we wish them the best because they've really done heroic work for those experiencing weird genetic disorders, whoelse would have done that, it's a beautiful thing.
Fintan Walton:
Sure, and for you Robert Coughlin personally you are a very driven guy in this particular area, you are very well known for your passion for this, where do you get that passion from?
Robert Coughlin:
My passion it's from a personal experience. I have a beautiful eight year old son that has a disease called cystic fibrosis that's an orphan disease, it's only 30,000 people in the country in the United States it's (indiscernable) it's a horrible disease. And many years back I got involved to raise money for this Cystic Fibrosis Foundation and I became a volunteer patient advocate, when the time came for me to leave government and move on to the next challenge I thought what better thing to do than to go work for an industry that cures diseases not just cystic fibrosis but every single known unmet medical need to mankind is being researched right in this area and to be able to represent them and create a climate so that these smart people can succeed, I can't think of any better ways to spend my time.
Future of Biotechnology industry and challenges for MassBio
Fintan Walton:
Sure, now when we go Robert into the future we are looking at where we are today the transformation that we've talked about, transformation in government policy, transformation in companies taking over biotech companies, the low in capital investment in biotech, lack of IPOs a lot of things have happened in the last couple of years that's changed the landscape of biotechnology as we know it, what is the future? How do you see the future Robert?
Robert Coughlin:
The future is bright, and I think you could you know you could be bold and say what's taking place over the last few years is a little economic darwinism only the real good ideas are getting funded and that's okay. I think as our success rate in getting products from the bench to the bedside the failure rate is way too high, it's way too high as we've reduced that you see big pharma companies becoming more efficient by investing in the nimble biotech companies to keep their pipeline robust, we are getting smarter on how we do business you know keep in mind these are the smartest people in the world that are working at these companies and they figured out how to get funded and how to continue to more if you would into a more efficient revenue model and business model.
Fintan Walton:
Right, and the challenge for you for MassBio going forward, what's the big issue that you need to tackle now in order to help that?
Robert Coughlin:
Time. you know I walk into a lab and you know for me lab is kind a all look the same and you walk into a lab you know see these people working around the clock and there will be a sign on the wall with like sick child and then it will say the patient is waiting, it takes too long to make these drugs.
Fintan Walton:
So you want to see a reduction in time?
Robert Coughlin:
Yes without sacrificing safety and efficacy, because that's the last thing any of us will want to do. So I mean in also educating the public is a huge challenge, new therapies and innovation is part of this solution of the cost of healthcare not the problem, not the problem, medicine and drugs only represents today 10% of the overall cost of healthcare. Hey I know my son takes medicine that keeps him alive, when he takes the medicine and it keeps him healthy it keeps him from meeting a lung transplant at this time that's less costly to keep him healthy, so when new drugs can keep people healthy and drive down the amount of the healthcare cost associated with hospitalizations, surgery et cetera that's a good thing, that's a good thing.
Fintan Walton:
Robert Coughlin, thank you very much indeed for coming on the show.
Robert Coughlin:
Thank you for having me, it's truly pleasure.
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
As President and CEO of the Massachusetts Biotechnology Council, Robert Coughlin '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. Robert Coughlin has 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. Robert Coughlin has 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 commercialisation.
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. Massachusetts Biotechnology Council are the leading advocate for the Bay State's world premier life science cluster and 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.