Notes from Joe

Health Care Reform: Missing the Innovation Boat

7.9.10

In the wake of passage of health care reform legislation, I’d like to share with you some thoughts that I have and some actions that we’re taking from a policy standpoint.

Let’s begin by recalling the Obama claim with regard to the health care industry’s participation in the legislative process.  The administration argued that, because the industry would benefit by a larger health care insurance pool, it should contribute back some of the windfall. The total minimal share of this legislation’s cost to the biopharmaceutical industry over the next ten years is now estimated at over $100 billion. We can debate how that compares to the potential increases in product sales due to the inclusion of some 35 million newly insured who will enter the system and to the closure of the Medicare Part D “donut hole.” But by most calculations that I’ve seen, it appears the industry is shouldering a good portion of the cost of the legislation without a balanced return on the “investment.”

Consider next another contribution to the cost of health care reform: the $20-billion, 10-year medical device excise tax. Thanks to Sen. Max Baucus of Montana (not exactly a medical device powerhouse of a state – and his initial proposal was for a $40-billion tax), our small to medium sized medical device companies in CA beginning in 2013 will be funneling about 3% of their revenues to support this tax – rather than on continued R&D or hiring staff. According to an analysis by J.P. Morgan, companies most impacted by this tax are “emerging growth companies that are earlier on the profitability curve.”  That doesn’t make much sense to me as a matter of federal policy; I would think these very companies should be excluded – which in fact was what the House version of the bill did. But this is how the “reconciliation” process works. While Reps. Brian Bilbray of San Diego and Erik Paulsen of Minnesota have separately introduced bills to repeal this tax (BIOCOM has endorsed the Bilbray legislation, as has MDMA) we might have to wait for a change in Congress to see any possibility of a fix.

Yes, there were aspects of this bill that benefited the life science industry tremendously. We fought long and hard with our partner organizations to obtain a remarkable 12 years of exclusivity for the originators of biosimilar drugs. We obtained a $1-billion therapeutic tax credit (originally proposed at $2 billion but reduced to half by the Senate). We supported health care reform, and we attempted to carve out the device tax to no avail – although several California Republicans and Democrats jointly signed a letter to Speaker Nancy Pelosi in opposition.

My point is this: This is the industry that is innovating to bring new products to doctors and patients that will improve health and quality of life, and in the longer term, will lower the overall cost of health care. Aren’t the Obama Administration and Congress missing the boat? Please continue to join me on my Washington trips as we tell our story.    

Building a Foundation that Creates Opportunities in China for BIOCOM Members

5.11.10

BIOCOM’s China initiative is progressing at a remarkable rate of complexity and speed. I’ve just returned from my third trip to China on behalf of BIOCOM. I am more convinced with each trip that the opportunities that exist there now, and that we are creating, will begin to benefit our membership in the very near future.

China’s engagement in major health care reform together with the interest of its government and biomedical industry are creating a new market for Southern California’s life sciences industry.

We have already built the foundation for some promising relationships in Beijing, China’s government center. During the last five months, I have been building relationships with key associations and organizations in Beijing, working closely with State Senator Lou Correa and his China staff expert, Jeffrey Leader. Last week I was in Beijing with Jeff, BIOCOM VP Jennifer Landress, and BIOCOM Board member Brent Jacobs of Cushman Wakefield. There I signed Memoranda of Understanding (MOUs) to cooperate with three of the most important organizations in life science in Beijing: the Beijing Changping Investment Promotions Bureau (the principle agency within the Changping District of Beijing city government promoting economic development. It contains the Zhongcuancun Life Science Park for life science where companies such as Genzyme and Novo Nordisk are located), the All China Pharmaceutical and Commercial Association (the principal internal trade association in China for the pharmaceutical, biotechnology and medical device industries), and the Beijing Pharma and Biotech Center (a Beijing city government agency that stimulates innovation, promotes industrial development and provides consulting services for the pharma and biotechnology industry).

The MOUs all focus on three key objectives: 1) creating open avenues for communication between southern California and Beijing’s growing life science industry; 2) providing opportunities for networking through attendance at conferences and other events held by the 4 organization; and 3) identifying potential partnerships and collaborations between companies in southern California and Beijing. They will provide the basis for future interaction between our regions in the life science arena.

Beyond the current MOU relationships, I had other meetings with the leaders of several important organizations that BIOCOM will build partnerships with in the future. These include the China Pharmaceutical Corporation (the largest pharma company in China), the Beijing Pharmaceutical Group (the third largest pharma company in China), Peking University (its biomedical engineering department will seek out tech transfer opportunities), and the China Chamber of Commerce for Import and Export of Medicines and Health Care Products (the leading trade association in China for promotion of international trade in medical devices and drugs). All are eager to work with southern California.

Finally, I am pleased to announce that David Jiang, former China strategist for Gen-Probe, will join BIOCOM as Senior Advisor, Corporate Development focusing specifically on our China initiative. David is knowledgeable about the Chinese life science market and will be active in seeking partnering opportunities for our members and in planning our upcoming Cal Asia Conference. Given the opportunities created by our newly established relationships in China, the skill set that David brings to BIOCOM will be invaluable to our membership.

A Productive $tart to 2010

3.11.10

It’s been a while since I’ve had the opportunity to let you know about my most recent activities. It has been a very busy 2010 at BIOCOM.

The debate over health care reform appears to have come to an abrupt standstill. That is disappointing given the year of investment made by our industry to contribute to a solution that would provide expanded health care coverage to more of the population. It’s difficult to say when such issues as biosimilars, comparative effectiveness and research funding for small companies will be taken up again. In the interim, it appears that there will be no excise tax on medical devices, and no $80 billion fee levied on the biopharmaceutical industry.

We returned to Washington in January and were back again the first week of March. What we have gained out of this exercise is a more informed and educated California Congressional delegation due to the efforts of all of our member CEOs, Washington, D.C. representation and partner organizations such as BIO and the California Healthcare Institute, both of which accompanied us to Capitol Hill.

I will continue these efforts this year focusing on SBIR and NIH budget increases, opportunities to work with the departments of Defense, Energy and Agriculture to access grant funding and to stay vigilant in the health care reform arena.

Two weeks ago I moderated a very successful roundtable with NIH Director Dr. Francis Collins here in San Diego, organized in partnership with Rep. Brian Bilbray. We had 25 representatives of the research, academic and life science sectors at the table to engage in a dialogue on how Southern California can better support Dr. Collins’ efforts to bring NIH funding to appropriate levels; the potential for the NIH to extend funding into the field of translational research, and creating more opportunity for young researchers to compete successfully for NIH grants. Dr. Collins was impressed both with our desire to collaboratively work to support him, and with the level of innovative work being done here as a result of the $1 billion in NIH funding that we received last year. I asked him to return in the near future to continue the dialogue in partnership with our life science community, and I look forward to inviting more of our CEOs and research leaders to participate.

Late last year, I told you about an initiative that I’ve launched to create a bridge between the life science industry in Southern California and China. I returned again to Beijing in February with State Senator Lou Correa to follow up with potential partner organizations that we had met last November . We were welcomed warmly and made some significant new contacts there. I am working with the Beijing Development Association; the Medical and Pharmaceutical Commercial Association of China and the Beijing Chang Ping Investment Promotions Bureau to create working agreements that will allow our companies to access funding and market opportunities in China, and more specifically in Beijing. We will return to China in April to continue to explore the Chinese life science market. I invite you to join us. This trip is about our member companies. Please let me know by email if you are interested.

Finally, I want to let you know about our most recent accomplishment in the area of life science workforce and education. Our BIOCOM Institute was recently successful, working in partnership with San Diego State University and others, in obtaining a $4.9 million life science workforce training grant. With a portion of this funding, BIOCOM will be able to make our Life Science Immersion Certificate program a reality and expand our on-line BioCollborative to include a life science military portal for veterans. The money will also help supplement internships for the Life Sciences Summer Institute so that you can bring these young people into your company with a subsidy that we will provide.

In Washington DC, Old is New Again in Health Care Reform

12.06.09

In my tenth and final trip in the first year of our Washington DC initiative, vigilance was needed to show that old ideas that have been previously tabled as detrimental to innovation are reemerging as amendments on various health care reform proposals.

As I moved between the House and Senate buildings for meetings with key members of Congress and the California delegation, the need for a continued presence of the Southern California life sciences community on Capitol Hill was obvious. And it reinforces the collaboration that BIOCOM has with its member companies and the California Healthcare Institute, BIO, PhRMA and MDMA to ensure that the life science industry has a voice in Congress.

One of the old ideas that continued to reemerge was an attempt by Sen. Byron Dorgan, D-Nebraska, to create a pathway for the importation of foreign drugs. (That amendment appears to have been defeated on 12/16) Meanwhile, Sen. Sherrod Brown, D-Ohio, attempted to limit the period of data exclusivity for biosimilars to $3.5 billion in total sales. Although 12 years data exclusivity is in a bill coming out of the Senate, there is no guarantee that it will remain there and not be replaced by Dorgan’s proposal. For that reason, I met with the staff of Sen. Dianne Feinstein, D- Ca., to ensure that we will continue to see the Senator defending us on these issues.

Another important proposal for our industry is one made by Sen. Robert Menendez, D-NJ. In an amendment to the package being debated on the Senate floor is Menendez’s proposal to make $1 billion in grant funding available for therapeutics companies.

Also crucial is our work explaining our opposition to excise tax on medical devices that could stifle innovation of products that could improve patient outcomes and decrease health care costs in the long run. Currently the Senate package proposed $20 billion in excise taxes over 10 years.

On the House side, BIOCOM continues to build relationships across the California delegation. During this trip I emphasized the need for 12 years of data exclusivity in the biosimilars issue during visits with Democrat Reps. Bob Filner, Doris Matsui and Susan Davis, and Republicans Brian Bilbray, Darrell Issa, Duncan Hunter, and Kevin McCarthy.

I also discussed amendments to the financial industry oversight legislation introduced in the House Financial Services Committee on a significant issue of importance to our small public company members – Sarbanes-Oxley requirements. New Jersey Reps. Scott Garret, a Republican, and John Adler, a Democrat, have introduced an amendment that would effectively eliminate Sarbanes-Oxley reporting requirements for those companies with less than $75 million in annual revenues, and would significantly reduce requirements for companies with sales between $75-250 million in revenues. We discussed this legislation with members of our San Diego delegation and have distributed letters to the entire California delegation supporting this amendment.

Procedurally speaking, after a bill has passed through the House or the Senate, it must then proceed to conference committee. It is in this committee that the differences in the two bills are worked out. A final bill must be approved by each chamber before moving to the President for signature. By most estimates, the health care reform legislation will, at best, be completed in mid-February, in time for President Obama’s State of the Union address.

As we move into next year, we will develop a schedule of Washington visits and other related events for the entire year. BIOCOM’s goal is to get more of our member companies working with me as we lobby our elected representatives in Washington DC. I need your support to take this program into the next year and growing our initiative to new levels.

Many thanks to those of you have supported us this year. I believe we are making measurable progress in a very important public policy initiative.

China Offers Exponential Growth Opportunities for the Life Sciences

11.23.09

Now is the time for Southern California companies to consider creating relationships in China, where changes in the health care system, continuing support from the government and increasing affluence are fueling a life science boom.

I saw this opportunity first-hand during a week-long mission to Beijing, which the nonprofit California Biotechnology Foundation in Sacramento arranged to launch BIOCOM's new Asia initiative. What I took away from the jam-packed trip was a better understanding of the tremendously valuable opportunity that BIOCOM members have to be a part of an exponential growth opportunity.

As chairman of the CBF, I worked with State Senator Lou Correa of Santa Ana and CBF Executive Director Patty Cooper to plan the trip. Joining us were State Senator Denise Ducheny and Assemblyman Marty Block, as well as Co-CEO of San Diego-based Althea Diagnostics Magda Marquet.

The trip included visits to two life science parks, which are actually small, self-sufficient towns within the city of Beijing. There are a total of 57 science parks throughout China. We also visited the most advanced cardiovascular hospital in China, and had meetings with economic development and investment promotion organizations in Beijing. We toured biotech and pharmaceutical companies, and we were briefed on the regulatory environment in China by members of a California-based law firm that has had offices there for more than a decade.

The Beijing and Central (what we call Federal) governments have for a few years now placed a significant amount of emphasis on the life science industry. Even with the current financial crisis, life science industry investment in China is up 31 percent for the year.

In Beijing, there is comprehensive government support for and investment in biotech and medical device companies. The Beijing Municipal Science and Technology Commission invests $43 million annually to support the industry there

The Chinese see life science as a collaborative opportunity, e.g. in academic exchange programs; joint R&D projects; in-licensing of products; as a clinical trials resource and in working with California companies to export products to the U.S. market.

Meanwhile, the executives and government officials I met with said China has a significant interest in accessing digital medical devices and components made by U.S. companies.

Health care reform is beginning to become a major thrust of the Chinese government. While big hospitals in large cities have dominated the medical care scene, the government plans to shift focus to include clinics and rural health care facilities. As this happens, there will be a need for basic products, especially generic drugs, for mass consumption.

There is a growing role for niche products within the growing high income population, regardless of whether health care insurance provides coverage. Nutritional products, diabetes treatment, smoking cessation, cancer diagnosis as well as the consumer cosmetic side such as dentistry and vision care are all growing rapidly.

Our members should take a long view toward moving into China. Some of today’s players in the Chinese market have been there for 25 years. But Chinese biotechs/biomeds see themselves at a disadvantage in the immediate future in translating basic science into products. They want to improve their quality control and brand recognition. They are looking for partnerships here in the U.S. In the next year BIOCOM will be looking toward creating more opportunity in China for our member CEOs as we return to China with Sen. Correa. I hope you will join us.

State Water Issues and Federal Health Care Reform Dominate BIOCOM’s Political Advocacy Agenda

11.2.09

October has been a month of political uncertainty in Sacramento and in Washington, D.C. While the vast majority of my advocacy efforts on your behalf have been in the health care reform arena, water – its availability and reliability - have dominated my attention in the policy arena for the past month. It is an issue that takes us back to the very roots of BIOCOM. And it demonstrates the importance of a consistent presence for BIOCOM in advocacy at the state and federal levels.

The State legislature has been debating a water package for the better part of the year, and the decision on a water bill and water bond has come to a head this month. BIOCOM has found it essential that we participate in the development of this package for two key reasons: 1) reliable water for the San Diego region is essential to the survival of the region as a whole, and specifically for our life science industry; and 2) an important provision of such a package is that the language of the bill provides assurance of water for research and development in the event of severe cutbacks due to drought under the definition of “process water”.

Our public policy team and I have made it clear in face to face meetings with our legislators and the Governor’s office that BIOCOM will oppose any efforts to mandate draconian conservation measures or restrict access by companies with regard to water necessary to the operation of the life science companies. We have been joined in this effort by the San Diego County Water authority, the Regional Chamber of Commerce, the San Diego EDC and CONNECT. I will continue to advocate for a water package, but as this package moves ahead BIOCOM will continue to advocate for a “process water” exemption.

On the federal front, health care reform continues to progress although haltingly and with uncertainty as to both what will be contained in a final bill and when legislation will be approved by Congress and sent to the President. Last month, I attended the annual AdvaMed medical device conference in Washington, where I had the opportunity to hear from members of Congress and the industry on the most recent topic of concern - a potential $40 billion medical device and diagnostics excise tax.

In September, I spent an entire day on Capitol Hill with my colleagues from the California Healthcare Institute, BayBio and Southern California Biomedical Council, lobbying the House and Senate in opposition to this proposed tax. The measure has been strongly opposed by both AdvaMmed and MDMA, yet it has found its way into both the Senate Finance Committee and full House versions of health care reform legislation. We continue to fight this battle, as our colleagues on the biopharma side face a proposed $120 billion increase in the House bill over the $80 billion already offered in fees assessed to our industry. It seems counterintuitive that the industry, whose innovative work is bringing down the cost of health care, is being penalized for doing so. As Pfizer’s Sr. VP of Worldwide Policy Greg Simon said in a meeting last week: “It’s like charging firemen for putting out fires!” And as former President Clinton explained when he joined us for breakfast at the Advamed conference, our challenge is that Congress understands only the uniform cost of health care, and not the value of contribution of innovative technology to bringing down the cost of health care.

We will return to Washington in early December to continue the lobbying efforts with our CEOs. We do not expect a package to be passed before the holidays. Please let me know if you would like to join me.

California's Life Science Delegation Descends on DC

9.28.09

Wall Street Investment Bankers Show Interest in BIOCOM’s Washington Efforts and are Cautiously Optimistic About an Increase in Life Science Deal Flow

8.13.09

Healthcare reform’s impact on life science innovation and the climate within the financial markets came together last week as I took my Washington, D.C experiences to New York City to meet with investment banking managers. The exchange with health care bankers representing firms such as Oppenheimer, Piper Jaffray, Rodman & Renshaw, RBC Capital Markets and Ladenburg Thalmann Financial Services proved to be a positive and constructive meeting of minds between public policy and finance. We engaged in discussions that allowed us to share perspectives on both sides.

My mission in New York was to draw greater attention to the Southern California life science industry, obtain insight into when financing of life science will begin to flow again, build relationships that will bridge BIOCOM with the New York bankers, and build support for our upcoming 4th Annual Investor Conference on October 26-27.

My background is in government relations and that’s been my primary focus here at BIOCOM. But there are dual needs within the regional community at this time – raising capital and ensuring that government policies support and do not harm investment in innovation. This situation creates a natural link between Wall Street and Capitol Hill, much different than the relationship the developed when the government was providing the banks assistance. I found the New York bankers genuinely interested in my experiences in Washington with patent reform, biosimilars, NIH funding and BIOCOM’s lobbying efforts with BIO and PhRMA as I was in understanding what types of companies and sectors they are focusing on, what the next few quarters will look like for companies seeking funding and how we can persuade them to spend more time in here in Southern California.

I explained to the bankers how our industry has made considerable progress in Washington since the beginning of the year: the move to enact patent reform legislation that would harm investment in medical devices and biopharmaceuticals has all but died out thanks to opposition by such Senators as Arlen Spector of Pennsylvania and Diane Feinstein of California, with whom we have built strong relationships. The NIH funding bill was passed last month, I explained, with the support of local Democrats such as Rep. Susan Davis and Rep. Bob Filner, but impressively with the added support of 20 Republicans (most voted “nay” last year) such as Rep. Brian Bilbray. Our industry-wide efforts to shore up protection for biosimilars resulted in a 17-6 vote in favor of 12 years of exclusivity by the Senate HELP Committee. Even more impressively, we defeated Rep. Waxman’s attempt to limit data exclusivity when his Energy and Commerce Committee dealt him a devastating blow, voting 47-11-1 in favor of the Eshoo Amendment to the health care bill that also grants 12 years of data exclusivity.

Overall, at half-time in the halls of Congress, I believe we have reason to be optimistic about the future of the innovative life science industry.

The bankers appear to share this optimism, suggesting that what began as the possibility of a single-payer, government run health care system earlier this year appears to have evolved into a more compromising, and much less threatening, discussion of broader private sector coverage at lower cost. The bankers praised PhRMA’s Billy Tauzin for his gesture early on with the White House to offer $80 billion from the pharmaceutical industry to close the “donut hole” in Medicare Part D.

Optimism is good, but the more telling sign is that all of these banking managers talked with me about the quickly improving stock market, the stability in the banking sector, and the dramatic, positive change in deal flow in the third quarter within the life science sector. They were cautiously optimistic about an impending IPO market if the market stability continues – not a massive opening in the window, but an opportunity for companies with solid progress in product development to seek the funding needed to carry products through final stages of clinical trials.

All the bankers I met with had long standing relationships with Southern California companies, and all were interested in building those relationships more broadly. They all indicated that if public policy in Congress and within the Obama Administration continues to support innovation, that the investment banking industries support of the life science sector will be strong.

Also on this trip I had an opportunity to meet John Sterling, Editor in Chief of Genetic Engineering News, thanks to the help of one of our very supportive member PR firms, Russo Partners. We discussed the importance of GEN having a full time reporter here to cover the biotechnology industry. John is committed to recruiting such an individual, which would give us much more exposure nationally as a competitive and innovative cluster. If you or anyone within your company knows of an individual who might be interested, please let me know and I will provide that information to John.

I’ll end on a reminder that BIOCOM’s 4^th Annual Investor Conference will take place at the Hyatt La Jolla at Aventine on October 26-27. The bankers with whom I met in New York have all been extended an invitation to join us. We expect to see many of them and their colleagues here in San Diego, along with representatives of the venture capital community, big biotech and pharma licensing and fund representatives, and more than 50 presenters. If you haven’t yet applied to present, visit www.biocom.org for all of the information that you’ll need to both attend and participate.

Plan a Summer Trip to Washington D.C., Where You Can Have a Voice in Health Care Reform and Biotech’s Future.

7.9.09

The health care reform movement continues to accelerate in Washington, with President Obama’s October deadline for the passage of a bill by the House and Senate looming large. I was back in Washington with some of our CEOs to continue to ensure that BIOCOM member interests are being addressed in the reform debate. Our partners at BIO, the California Healthcare Institute and PhRMA were also included in this week of meetings and strategy development. Adding to the collaboration was Amylin Pharmaceutical’s Senior Director of Government and Policy Bill Franco and our Congressional advisor, DLA Piper’s Gary Klein .

We owe great thanks to International Stem Cell’s Jeffrey Janus and Mpex Pharma’s Dan Burgess for taking the time to join me at this very critical point in legislative development on Capital Hill. We explained to the members of the House and Senate with whom we met - including Reps. Susan Davis, Lois Capps, Wally Herger and Duncan Hunter, as well as very important meeting with Sen. Diane Feinstein - that our elected representatives from CA must not allow the perfect storm to develop on Capital Hill and swamp the life science industry. We explained that the agreement that was made by Senators Hatch and Kennedy to provide 12 years of data exclusivity for the original developer of a biotech drug must not collapse. We recruited more members of Congress to join the 110 who have already signed as co-sponsors to the Eshoo, Insley, Barton biosimilars legislation. These signatures are needed to try to fend off attempts by Rep. Henry Waxman to reduce exclusivity to just a few years.

In our many meetings on Capital Hill, we stressed the importance of conducting not just economics-based comparative effectiveness analysis on drugs, diagnostics and devices, but to ensure that it is science based as well. Above all, we asked our elected representatives to protect the innovativeness of the life science industry. There was no more effective way to accomplish this than to have them hear directly from our CEOs.

I urge you to join me in this effort. The situation continues to grow more urgent. I am pleased, however, to say that our Washington D.C. public policy initiative is working and demonstrating BIOCOM, working with members and sister organization, are having an impact. Please join me when I return to Washington D.C. next month.

Before signing off, I want to mention the success of our first CalAsia conference on June 14 through 16. The first of what we hope will be an annual event, served as a bridge between life science companies in California and those in the Pacific Rim. During two days of partnering meetings, panel presentations and networking , CalAsia brought together more than 350 CEOs and other executives in an unprecedented forum. I was pleased to see so many of our CEOs in attendance and even more pleased to receive their feedback about the importance and success of this effort. Click back to our home page to see photos of the attendees . Our goal was, and will continue to be, to build the relationships between our life science companies in Southern Califonia and those in Asia and Australia, to foster business deals.

I know that our Co-Chairmen Randy Woods (also BIOCOM’s 2009 Board Chair) and Steve Mento were pleased with the result. Personally, I learned a great deal from the presenters and appreciated the opportunity to network with so many individuals from every walk of professional life, from government officials to regulatory experts, to our ever visionary partner in the effort, Steven Burrill.

Health Care Reform is building steam, dominating the agenda on Capitol Hill.

6.9.09

Last week I returned to Washington, D.C. to work further on our initiative to bring together the California congressional delegation and to collaborate with our partner policy organizations. I arrived to find that the debate over health care reform clearly building steam and dominating the policy scene overall.

In many ways, though, it was one of the most productive of my six trips this year.

Attending the opening of the new Life Tech office on my arrival, I was able to connect with many of the government affairs reps of our member companies, and to spend some time discussing health care reform with PhRMA's Billy Tauzin, who took the time out of his busy schedule to be there.

I was also able to attend one day of the Medical Device Manufacturers Association conference as a guest of mark Leahy, their Executive Director with whom we have worked closely. There, I received the most up to date information on SBIR funding opportunities to pass on to our members, as well as having the opportunity to hear from CDRH Director Dan Schultz on FDA's initiatives in the device and diagnostics arena.

On Capital Hill, I can't overemphasize how important it is becoming for BIOCOM and our member CEOs, as well as our Washington government affairs reps, to become engaged. My days on the Hill last week were spent meeting with more of our CA delegation members - this in follow-up to a week here in San Diego of meetings with Reps. Brian Bilbray and Ken Calvert as well as with Sens. Feinstein and Specter - to inform, educate and lobby about our industry. In meetings with Reps. Filner, and the senior staff members of Reps. Campbell and Roybal-Allard, CHI's Todd Gillenwater and I discussed follow-on biologics, patent reform, comparative effectiveness, and in the context of health care reform, the maintenance of a free market process for health care including prescription therapies and devices.

On a more poignant note, I was able to attend the unveiling in the Capitol Rotunda of the statue of our 40th President, Ronald Reagan, as a guest of Rep. Calvert. Some of you are aware that my years in government were spent as a senior policy analyst in the Reagan Administration. Being a part of the "Reagan Revolution", a belief in the American people and optimism about the future, politics aside, was an experience that has influenced me through my entire career. It was a moving experience, and it was an absolute thrill to be back around folks like James Baker, Edwin Meese, and Henry Kissinger (I felt much younger than I do when I meet with today's Hill staffers - many of whom were not even born then). As I sat through the ceremony, it became clear to me that Ronald Reagan took office at a similar time of economic downturn, the threat of an outside force destroying America, and the need for optimism about the future. Seeing the glimmer in President Reagan's eyes and the smile on his face in the Rotunda gave me cause to believe even more that we have much to look forward to.

Ensuring the industry's voice is heard on health care reform and other issues.

5.22.09

As we move toward midyear in what is certainly one of the most challenging times for our industry on more than one front, I continue to focus our efforts on the serious federal legislative issues that confront us. To more fully understand how health care reform in Congress is tied to issues such as patent reform, follow on biologics, NIH funding, and the stimulus plan, I invited Dr. Paul Keckley, Executive Director for the Deloitte Center for Health Solutions, to speak to the BIOCOM Board and discuss these issues at our annual Orange County Board meeting on May 14. It was truly a priceless opportunity to hear from a Washington "insider" on health care reform so that we can better focus our Washington D.C Initiative that has recently been approved by the Executive Committee and the Board. I'll be working more closely with Dr. Keckley on my upcoming trips to D.C to better focus our strategy. In short, he explained that the attention of every member of Congress and the Obama administration is now focused on this issue, and that little else will command their attention until health care reform is fully debated in both the House and Senate. But he acknowledged the importance of our other issues and fully encouraged us to continue as we have in pursuing relationships with our entire CA delegation - and more importantly, in continuing to take our CEOs to Washington to speak face-to-face to our elected representatives and their staff members. I hope you will let me know if you can join me on my next visit, June 1-4 - and if you on the east coast and would like to come down to D.C for a day, please consider doing so as well.

I attended the BIO 2009 Convention in Atlanta this week, where we hosted delegates from around the world at the California Life Science Alliance booth in the California Pavilion. We also worked with CA Deputy Secretary of Business, Transportation and Housing Katherine Lowell to identify and meet with CA companies at BIO 2009. While at BIO, I chaired a very well attended panel presentation on the new model for business and science training of life science managers, the Professional Science Management degree, which I have worked with the CSU system to develop as co-chair of the PSM Advisory Committee. Interest and support for the PSM has come from such industry leaders as Life Technologies, Gen-Probe, BD scientific and Mannkind as we work together to develop our evolving workforce of tomorrow in life sciences.

I signed a very promising Memorandum of Understanding with ACS TechCatalyst^TM, a subsidiary of the American Chemical Society, which furthers BIOCOM's capital formation efforts for our region's life science companies. TechCatalyst^TM was established by ACS with the mission of enabling the commercialization of chemical and allied science (C&AS) based technologies through technical advice, management assistance and capital for product development. After I discussed with TechCatalyst how there is an increased demand in Southern California based small businesses for capital to fund the commercialization of early-stage life science based technologies; ACS TechCatalyst^TM and BIOCOM agreed to study and discuss the creation of an investment fund that would provide such funding to Southern California based entrepreneurs; an

Under the MOU, ACS TechCatalyst^TM and BIOCOM agree to use commercially reasonable efforts to promote and evolve the development of a $50MM investment fund ("Matching Fund") to co-invest with ACS TechCatalyst^TM in Southern California based small businesses commercializing promising early-stage life science technologies. ACS has agreed to provide the initial $25 million in funding and the two organizations will work together to find the matching $25 million.

Back in DC

5.1.09

Last week I was back in Washington D.C., where I had the opportunity to meet with more of the California Congressional delegation and their staff members to educate them about the importance of supporting us on follow on biologics and patent reform. Most important was my meeting Congressman Henry Waxman's counsel on follow-on biologics, Ann Witt, for over an hour. Although there is still a divide between our philosophies, I emerged from these meetings at least marginally more optimistic that Chairman Waxman, Congresswoman Anna Eshoo, and the life sciences community may be able to come to an agreement on a pathway for approval of follow-on biologics that does not threaten the very existence of the industry but also allows patients access to safe and effective follow-on products.

Board member and CEO of Mpex, Dan Burgess, accompanied me on this DC trip, and the two of us had a very fruitful discussion at NIH with Dr. John McGowan, Director of the NIAID Office of Science Management and Operations. Dr. McGowan gave us a great rundown of all of the efforts that his Institute has initiated to provide grant opportunities for our industry. He noted that later this summer, NIH will issue guidance on grants that will be available to VC backed companies, thus opening a door that has been closed for several years under a reinterpretation of SBIR rules.

As you probably know, 670 members of our community were present this week for our BIOCOM Annual Dinner. Our keynote speaker, Montel Williams, was inspiring on more than one front. His frank discussion of his daily battle with multiple sclerosis was nothing short of awesome. And his challenge to our industry to tell our story proudly to the public was motivational. I've received many comments from those who attended that this was one of our best Annual Dinners ever. Even with the current state of the economy our attendance was down only slightly from years past. I am heartened by the fact the dinner was well attended and that those who came thoroughly enjoyed our "Celebration of Life."

Seeing Both Sides at PhRMA

4.06.09

I completed last week with a stop at the PhRMA annual conference where I had the opportunity to once again, for the third year, witness the evolution in policy behavior that is taking place in that organization under the leadership of Billy Tauzin and board chairs such as Richard Clark of Merck and David Brennan of AstraZeneca. The stage was filled each day with speakers representing the minority and patient advocacy communities, political leaders representing both sides of the aisle - but more Democrats than Republicans, and such provocative thinkers as the CEOs of the X Prize Foundation and Faster Cures. My most beneficial experience was participating in a 2 ½ hour discussion led by political strategist Paul Begala and former Rep. Dick Gephardt on how to partner with government to stimulate innovation in the biopharmaceutical industry. I left the meeting with the clear understanding that PhRMA continues to work to change the image it has had among the patient community and politicians for the better.

BIO's DC Fly-In

4.1.09

After Life Sciences Day at the state capital, I traveled back to Washington D.C. again last week to further pursue the goal our board agreed upon for this year to represent the needs and interests of the Southern California life science community during this volatile and changing political environment. Partnerships with our company member reps in D.C. are important to me in leveraging our abilities, and that meant meeting with government affairs teams from Amylin and Vertex to coordinate efforts on biosimilars and patent reform legislation. I then took the opportunity with the leaders of our California Life Science Alliance to meet with representatives of the NIH (NIAID and NCI) and the Department of Defense to discuss SBIR funding opportunities, making plans with them to hold seminars here in California in the near future to help our companies to more effectively access available funding. The annual BIO Legislative Day Fly-In 2009 on Capital Hill followed, where we had constructive discussions with Southern California legislators such as Henry Waxman, Brian Bilbray, Susan Davis, Bob Filner and Linda Sanchez. Reps. Bilbray and Davis continue to show leadership on our issues, and I believe we made progress in persuading Mr. Filner and Ms. Sanchez to understand our position on biosimilars and patent reform.

Live from the other capital, Sacramento

3.25.09

I participated in California Life Sciences Day at the Capital in March, the advocacy event that we created several years ago and now share with CHI, BayBIO and SCBC, where I lead our San Diego delegation. The importance of getting our CEOs in front of legislators came through clearly as we heard from the inimitable former Assembly speaker Willie Brown on how to advocate effectively, discussed further initiatives together with Assembly Member Nathan Fletcher (who spearheaded the successful effort to move to a single sales factor for corporate taxes), and strategized with Assembly Majority Leader Alberto Torrico about getting more students interested in life science careers. Quality time with these leaders is something that I hope more of you will join me in creating, as only we together can influence change in Sacramento.

Back in DC

3.23.09

Jimmy Jackson of BIOCOM, Randy Woods of Sequel, Steve Mento of Conatus, Rep. Jackie Speier (D-12^th), Duane Roth of CONNECT and Joe Panetta of BIOCOM.

Last week on my most recent trip to Washington, D.C. I initiated inviting CEOs to join me in our effort to inform and persuade members of Congress of the need to support the Southern California life science industry. I was accompanied by our VP of public policy and communications, Jimmy Jackson, our board chairman Randy Woods of Sequel Pharmaceuticals and former chairmen Steve Mento of Conatus Pharmaceuticals and Duane Roth of CEO of CONNECT and of Alliance Pharmaceutical. I think it goes without saying that the political and policy landscape in DC has been changing on a weekly basis this year, and last week was no exception making it timely and valuable for us to be on Capital Hill. As we arrived, legislation was just being reintroduced in the Senate by Sen. Leahy to overhaul our strong system of patent protection, while on the House side Reps. Eshoo, Insley and Barton had just reintroduced legislation to permit the approval of follow on biologics, or biosimilars as they are also known.

Having our chairman and other CEOs with us proved to be the invaluable resource that we had expected it would, as we turned to them to explain to members and staff the direct impact that such legislation can have on our companies and our southern California life science industry, for both biotechnology products and medical devices. In at meeting at the office of Sen. Diane Feinstein, Randy and Steve made clear points regarding the value of patents to their life science companies in providing a level of confidence to investors, both saying that any weakening of patent protection, as proposed by the Leahy bill, would be dangerous for the industry.

On the House side, in addition to meeting with our strong supporters Reps. Susan Davis and Brian Bilbray, we expanded our reach to other parts of California, meeting with newly elected Rep. Jackie Speier and minority whip Rep. Kevin McCarthy.

In addition to discussing patent reform, our CEOs made it clear to members and staff that the Eshoo bill on biosimilars, providing 12 years of data exclusivity is much preferred to the potentially damaging competing legislation that is being championed by Rep. Henry Waxman of Hollywood. Our two days also included key briefings with BIO staff, PhRMA President Billy Tauzin and policy gurus such as former patent commissioner Nick Godici and Medicare part D author John McManus. One highlight of the trip was a night time tour of the U.S. Capital led by Rep. Bilbray complete with a walk onto the Senate floor that capped off a 12-hour working day.

We'll be back in DC next week to participate in the BIO legislative fly in, but as I know the three CEOs who came with me will agree, your presence with us in DC is invaluable and necessary. Please let me know if you would like to join us on an upcoming trip.

Obama Administration Opens Federal Support of Stem Cell Research

3.10.2009

President Obama's decision to overturn the ban on Federally funding stem cell research is a milestone for our industry. We can now move forward at an important time when the President and Congress have also chosen to increase the NIH research budget by an additional $10 billion over the next two years. We now have an opportunity to steer a good portion of these dollars to research involving embryonic stem cells. This decision will make us more competitive with the rest of the world, it will encourage American scientists to remain in the United States to do their work, and encourage new scientists to enter the field. It will create new stem cell technologies in research institutes and universities, fueling the creation of new companies that will develop new stem cell therapies, and it will encourage companies that develop tools for such research to grow and expand. This decision by the President is a boost to our industry, especially after he recently mentioned his support for scientific innovation and entrepreneurship in his address to a joint session of Congress (Editors note: this item was also picked up in Xconomy.com’s reaction piece from the local community on the issue. Several member companies were also mentioned in this editorial at the Union-Tribune).

Live from Congress at the Obama Address

2.25.09

I returned again to Washington D.C. last week to continue work on our important initiative to take the challenges and needs of the Southern California life science community directly to members of Congress and the new administration. I was fortunate enough during my trip to beable to attend the President’s address to a joint session of Congress (many thanks to Rep. Brian Bilbray),hearing in person his vision for our emergence out of the economic slump that we are in. Three portions of his speech caught my attention as having direct relevance to our life science industry:

1.“The answers to our problems don't lie beyond our reach. They exist in our laboratories and our universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.”

2. “Now is the time to jump-start job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down.”

3. “When there's no lending, families can't afford to buy homes or cars, so businesses are forced to make layoffs. Our economy suffers even more,and credit dries up even further. That is why this administration ismoving swiftly and aggressively to break this destructive cycle, torestore confidence, and restart lending.”

Investment inresearch and confidence in entrepreneurs; job creation in health care;and getting capital flowing again for investment – all urgent needs and challenges that, I am hopeful, regardless of which side of the aisle we side with, will work to stimulate the growth of our industry at acrucial time. I know, too, that we have concern in ensuring that we will not be harmed by other initiatives, and that is also why we are ensuring that we are present there.

A Crowded NIH Funding Briefing with Dr. Reed

2.27.09

Another important reason for my being in Washington D.C. was to share the day with Dr. John Reed of the Burnham Institute and a BIOCOM Board member in meeting with members of Congress and their staff representatives to discuss the importance of continued, consistent funding of the NIH at levels each year that keep pace with needs and with inflation. While we are fortunate that the economic stimulus bill contains a one-time, 2-year $10 billion increase in funding thanks to Sen. Arlen Spector, we know that we will face the challenge of ensuring continued funding for the long term. Our meetings with Rep. Mary Bono Mack; Rep. Brian Bilbray, and the office of Rep. Lois Capps served to continue to meet our goal of expanding our reach throughout the southern CA delegation. I also used these meetings to continue to make the case for strong patent protection, tied to the need to ensurean adequate period of date exclusivity in the face of legislation approving FDA movement to review follow on biologics.

The highlight of our day on the Hill was our long planned briefing of Congressional members and staff, held in partnership with BIO, in which John Reed discussed in detail the economic impact of NIH funded research on healthcare and jobs in a very effective manner. For a copy of John’s presentation, you can contact Tim Ingersoll, our communications director. We had a standing room only crowd in attendance and the Q&A lasted well beyond our scheduled one hour briefing time, demonstrating the level of interest in this issue across Congress. We will be following up with the briefing attendees in future meetings this month to continue to make the case for NIH funding, as well as meeting with other CA delegation members to discuss our key issues. As we move ahead with our DC initiative, I am confident that the progress that we make will be based upon first developing relationships of trust with our elected representatives and developing stronger partnerships with our national associations, and next advocating strongly for the needs of our industry. I’ll be back in DC soon with our chairman, Randy Woods of Sequel Pharmaceuticals, and with several other members as we take more of a face to face CEO story to Congress and the administration.

Tour of California Shows Biotech and Industry at its Best

2.23.09

We caught the final stage of the Amgen Tour of California in Escondido this weekend. It was amazing to see that many riders who have ridden that far over the course of eight days, and a good time to reconnect with old friends at the Amgen tent, which was right on the finish line. It was also interesting in that the life science community has definitely contributed directly to some riders in the Peloton, most famously to Lance Armstrong, who