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Tough times for biotech IPOs: MedCity Morning Read, Feb. 26, 2010

The decision of Anthera Pharmaceuticals this week to delay its initial public offering signals rough going in the IPO market for biotech firms.

By Brandon Glenn on February 26, 2010
Image by mikebaird via Flickr

Highlights  of the important and the interesting from the world of health care:

Tough times for biotech IPOs: The decision of Anthera Pharmaceuticals this week to delay its initial public offering signals rough going in the IPO market for biotech firms. Anthera’s underwriters declined to comment on the reason for decision, Reuters reports. But an analyst had a good idea why it happened: “Investors were likely concerned about Anthera’s inadequate funding, unclear timeline to commercialization and lack of collaboration agreements with larger pharmas.” Anthera’s postponement comes on the heels of an IPO by  Ironwood Pharmaceuticals which netted the company far less than it had planned. Irownwood sought a price between $14 and $16 a share, but had to settle for $11.25.

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A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

By PurpleLab

Anthera’s postponement marks the seventh time a company has delayed an IPO this  year. Worse, the 10 companies that have completed IPOs cut their prices by 30 percent on average, Bloomberg reports. To be clear, most of those companies weren’t biotechs. But the takeaway from recent events is that today’s market isn’t going to support the traditional biotech startup that has big dreams but no sales, FierceBiotech reports.

 
The FDA and EHRs–a match made in acronym heaven: Concerned about six deaths reportedly linked to electronic health records systems, the U.S. Food and Drug Administration is considering whether to bring health information technology under its regulatory purview, the Huffington Post reports. And those six deaths may be only “the tip of the iceberg,” an FDA official warns. The agency has received 260 reports of “adverse events” caused by health information technology over the last two years, and bear in mind that these are just voluntary reports so the numbers could be much higher.

The FDA says the adverse events generally had one of four causes: Errors involving the confusion of one patient’s records with another’s, or the mistaken combination of two patients’ medical files; the loss of information or the corruption of data; medication and/or dosing errors; and software incompatibility issues. For a rare and refreshing instance of a member of an industry actually welcoming regulation, and in turn unselfishly acknowledging the reality that regulation can actually be to the public’s benefit (even if it is to the industry’s detriment), I salute prominent tech blogger Health Care IT Guy:

Without stricter regulations like we have on medical devices, I’m afraid we won’t get the safety attention we need to bring to bear. Hospital IT systems can, do, and will kill when not used or implemented properly. It’s a shame that we need the government to improve quality but maybe just the fear of regulations can do the trick.
What makes a city entrepreneurial? Harvard’s David Luberoff examines the latest research on regional entrepreneurialism in a post that’s well worth reading at Xconomy. Research suggests a correlation between small companies and employment growth, and the opposite effect with large firms.  The theory is that the presence of many small firms creates an infrastructure that makes it easier for new firms to enter the local marketplace, Luberoff says. Perhaps the big takeaway for economic development professionals is that time spent chasing big companies to relocate to your  city isn’t time well spent. “These firms may provide an immediate headline associated with new jobs, but encouraging a profusion of small, independent firms is more likely to lead to sustained economic growth,” Luberoff writes.

Dear Mr. President: Georgia physician Rob Lamberts, guesting at The Health Care Blog, takes his shot at a letter to President Obama written from the perspective of a primary care physician.  Lamberts says regardless of political leanings, his patients feel frustrated, disillusioned and pessimistic about the health overhaul. While short on specifics, Lamberts does a good job of summing up the public’s misgivings about health reform, particularly the ideas that big business is influencing the process too much and nearly all the legislators involved are more concerned with furthering their own political goals than furthering the health of the American people. While Lamberts takes pains to hide his own political preferences, his revolutionary language would make any Tea Partier proud.
Stop pandering to your parties and start serving us. Stop jockeying for power and start fighting for what’s right. If you don’t, I think it’s just a matter of time before angry mobs with torches show up at your doorstep, before another shot is heard in a small town in Massachusetts and another revolution is joined.