While the funding environment for early stage life science companies can best be described as challenging, there are several myths that should not dissuade you from moving ahead with your idea. Early stage development money is never easy to find, but is there if you know where to look..like India or Israel.
Myth 1: Investors don't want to be more that an hour from their investments
Contrary to the convention wisdom that the smart money is only on the US coasts in Boston and San Francisco, pundits note that foreign investors are scanning the world for biotech and other life science opportunties. This is another example of how biomedical companies are born global, sourcing resources from around the world.
In contrast with global trends in other industries, foreign investment activity in the life sciences industry marked a steadily growing path. With more than 32,000 new announced jobs by international companies abroad – representing a 10% increase compared to 2008 – the pharma, medical and healthcare industries entered the global top sectors ranking for foreign investment. (http://www.life-science.se/se/74)
Myth 2: Biotech has taken a back seat to clean tech and software.
Close, but no cigar. The trouble is clean tech wasn’t even the largest investment category in the second quarter. It did top software and biotech in the third quarter. But for the year, clean-tech investments added up to between $1.9 billion and $2.6 billion while spending on software start-ups was at least $3.1 billion and biotech funding came in at about $3.5 billion. http://www.facebook.com/note.php?note_id=309979893364
Myth 3: Pharma companies are spending lots on R/D
The former head of Smith Kline Beecham observed that "Large pharmaceutical conglomerates spend 25-30% of their earnings on sales and marketing,and then spend 15% on R/D. They will need to swap these two items if they want to create earnings in the future". What's more, whilst it is widely acknowledged that the clinical development of medicines costs time and money, it should also be borne in mind that, according to a February 2000 NIH study, “public researchers often tackle the riskiest and most costly research, which is basic research, making it easier for industry to profit.”
Erythroprotein (Epo) was discovered after two decades of work by a university biochemist called Eugene Goldwasser at the University of Chicago. Marketed as Epogen by Amgen, it has gone on to become one of the world´s best-selling biotech drugs. But a large proportion of the basic R&D was paid for by the US taxpayer. http://www.eaepc.org/parallel_distribution/myth.php?n=2
The world is changing. Be aware that yesterday's truth is today's myth.
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