Renowned biotech specialist, venture capitalist, author and keynote speaker Mr. Burrill offers his predictions for biotech. He sees a dynamic industry writing a new "play book" in response to an environment that: favors risk mitigated companies rather than earlier stage development companies that have a much higher risk profile; emerging biotech markets, particularly in Brazil, Chile, China, India, Malaysia and Russia, growing faster than the United States and Europe; challenges created by healthcare reform; and opportunities for companies operating in the biogreentech space.

"The collapse of the financial markets and systems has been a major force in reshaping the landscape, but it is far from the only factor," says G. Steven Burrill, CEO of Burrill & Company. "Rather, the financial crisis has helped accelerate the changes already underway, ranging from globalization, to healthcare reform, to climate change. Biotech executives are currently writing their new 'play book' in response.

"As I discuss in my upcoming book – Biotech 2011-Life Sciences: Looking Back to See Ahead - expect to see the biotech industry as a whole perform better in 2011 as the financing environment continues to improve. Investors will reward risk mitigated companies and those that are able to execute on their business plans. There will be no major slow down in big Pharma's appetite for biotech partnering. Both big pharma and big biotech will again compete for companies with advanced product pipelines, as well as important land grabs of technology. Partnership deals will reflect 'shared risk' by smaller upfront payments and larger ones on achievement of milestones. Collaborations with emerging market players in China, India and Latin America will also increase.

"Overall the upcoming year will be a good one for the biotechnology industry," concludes Burrill.

Predictions for 2011

•Biotech and the Capital Markets:[b/] The biotech industry did benefit from the return of investor confidence in the second half of the year...with the Burrill Biotech Select Index outperforming the Dow Jones Industrial Average on an annual basis. Expect to see the biotech industry continue to outperform the general markets as the financing environment continues to improve in 2011.

•[b]Biotech IPOs:[b/] The biotech IPO window will remain open despite the fact that the 17 new biotech issues that debuted on the U.S. market in 2010 were plagued by lackluster receptions (selling fewer shares well below the pricing range) and their average annual market performance was down by 13 percent. By the end of 2011, I predict that at least 25 biotech IPOs, possibly more, in the US will be completed.

•[b]Capital: The industry has achieved a "steady state" in terms of financing...raising about $15 billion annually. This situation will continue in 2011. The industry's collective market cap will also remain at its present $360 billion level as market value growth will be offset by acquisitions.

•Partnering: There will be no major slow down in big Pharma's appetite for biotech partnering. Both big pharma and big biotech will again compete for companies with advanced product pipelines. The deal structures will embrace "shared risk". The days when biotech enjoyed major upfront payments for pharma companies to access their technologies are over. Collaborations with emerging market players in China, India and Latin America will also increase.

•Mergers & Acquisitions: The predicted surge in big Pharma acquisitions of biotech companies did not happen in 2010. It will in 2011. Sanofi will finally seal the deal and acquire Genzyme and this will usher in several other marquee acquisitions of blue chip biotech companies.

•Pharma Restructuring: Pharma companies will continue to make job cuts and restructuring their businesses ahead of loss of patents protection on major blockbusters.

•Increased government involvement on healthcare: The federal government, through Medicare and Medicaid, will continue to play a greater role in the delivery and reimbursement of healthcare. This trend will create an array of new regulatory and compensatory rules, issues, and challenges for healthcare providers.

•Biosimilars: Healthcare reform carries provision instructing the FDA to create a pathway for biosimilars and expect to see both biotech and pharma companies take a keen interest in the discussions on the drafting of new regulations governing the development of biosimilars.

•Converging technologies impact healthcare: Expect to see a greater emphasis on prevention and wellness. A greater understanding of human genomics and the advent of molecular diagnostics, and the convergence of information, wireless, and medical technology promises to make personalized medicine an ever present reality in the way doctors and patients approach healthcare.

•Regulatory environment: The industry will continue to adjust to a regulatory environment that includes comparative effectiveness research (CER). Payors will be looking at CER as a way to gather the necessary data on whether to reimburse for genomically guided medicines. With PDUFA expiring in 2012 there will be a major battleground over drug safety and review issues in Congress in 2011.

•Science and Technology: The evolving legal battle over the patentability of genes will heat up; uncertainty will continue to swirl around stem cells but regenerative medicine will be hot.

•Clean tech will boom: The clean tech boom in non-food crops will continue as major investments in solar power, wind power, and next generation biofuels gets attention. The market will not only embrace green, but technologies that improve energy efficiency and environmental "friendliness"—less polluting and less consuming.

•Global markets: Expect emerging markets to continue to be a dominant factor. Increasing affluence, a growing middle class, and government policies will make healthcare big business in these countries.