These companies are basically in constant need of funds to bridge the gap between innovation and medicine. “The current financial climate is tough,” says CEO of arGen-X, Tim Van Hauwermeiren, whose company is active in cancer-fighting drugs. “We have enough funds to last us until the second half of 2015. At some stage we will have to join forces with a player in the pharmaceuticals field. But we want to do that from a position of strength.” Strength is a crucial requirement and Jan Dekerpel, a biotech analyst for KBC Securities agrees, saying: “The cost of clinial trials continues to increase. This often forces companies to seek a partner at a premature phase and consequently surrender what could become a key share of their value.”
One such example is Galapagos, which sought the support of Abbot Laboratories (US). Other cases see companies spending less on research because they have to curb their expenditure. “We must continue to innovate,” says Johan Cardoen, CEO of the Flemish Institute for Biotechnology (VIB). Here the government plays a key role through VIB and the Agency for Innovation throught Science and Technology (IWT).
Bernard Coulie of ActoGenix confirms that funding is increasingly hard to come by. “In the past a company like ours could be listed on the stock exchange. Today that’s not even an option. Institutional investors have become more cautious.” Moreover venture capital companies like KBC Private Equity and ING have disappeared from the playing field.
Despite all this caution from investors, the stem cell company Cardio3 Biosciences still plans to list, as they see no other option to raise funds and move forward. Biocartis, the company owned by Rudi Pauwels, also needs funds but is not planning a listing at this stage. “With his reputation Pauwels is in a position to convince venture capital funds,” says investment specialist Ruth Devenyns. Pauwels, who established the HIV inhibiting drug developer Tibotec-Virco was also a cofounder of Galapagos.
De Standaard
