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Biotechnically Speaking


									     Special advertiSing Section

                      The business of life science
                      breakthroughs has refocused
                      and is on the rebound from
                      the economic downturn


                                                                                                                            In partnershIp wIth

                ometimes glitter isn’t all that       Genome Sciences now has its first drug on        sexy, but they’re enabling the sector to
                sparkles. Just ask prescription       the market, and expects profitability by 2013.   remake itself for leanness and longevity.
                drug developers, who haven’t              This year has also opened doors to               “Companies are struggling to recover from
                had a real blockbuster since the      new therapeutic treatments for hepatitis C       the economic crisis, and to accelerate growth,
                1990s. Sure, they’re still working    in the U.S. and for multiple sclerosis in        hiring and research,” says Jim Greenwood,
                on potential home-run treatments      Europe. Such promising developments              president and CEO of the Biotechnology
                that they hope will one day sell as   are vindicating industry trends. This            Industry Organization (BIO), which represents
     well as Prozac or Viagra. These days, how-       week’s 2011 BIO International Convention         1,100 organizations with ties to the industry.
     ever, biotechnology firms are taking less        in Washington, D.C. highlights effec-            “But we have seen very promising signs that
                                                                                                                                                        Scott tySick/Getty imaGeS

     high-flying, more sure-and-steady paths to       tive strategies for maximizing returns on        the industry is in an upward swing.”
     increased profits.                               investment—not only in years ahead,                  Biotech refers to a diverse industry fa-
         Patience and discipline are paying off.      but also right now. Topics include turning       mous for turning life science breakthroughs
     Earlier this year, the Food and Drug Admin-      underutilized assets into dynamic revenue        into widely adopted products that dramati-
     istration (FDA) opened the gate for Benlysta,    producers, and crafting lucrative licensing      cally change how people live. It includes not
     the first new lupus drug to receive approval     partnerships with pharmaceutical com-            only research ventures that lead to new drug
     in 56 years. As a result, 19-year-old Human      panies. Such brass tacks aren’t especially       therapies, but also scientific innovations in
With a commitment to scientific rigor and
the pursuit of excellence, we are working
systematically to achieve breakthrough results
one careful step at a time.

Human Genome Sciences, Inc.
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           food and fuel, from salt-tolerant crops and       Risks and roadblocks                             finding new applications for Benlysta, which
           drought-resistant seeds to ethanol derived                                                         might one day treat non-lupus conditions
           from algae and other plant matter.
                                                             notwithstanding, investors                       such as vasculitis, and moving other drugs
               Markets are responding as investors           are acting on biotech’s                          through the pipeline.
           and joint venture partners maneuver to            bright prospects.                                    To be sure, biotech still faces its share of
           jump at today’s emerging opportunities.                                                            challenges. Toughened regulations continue
           The NASDAQ’s Biotech Index (NBI) was                                                               to pose hurdles as companies spend years,
           up 15 percent through the end of May,             about mapping the human genome, HGS              and sometimes up to $1 billion, to get a
           outpacing most other sectors. There have          focused on practical applications.               drug approved. Amidst long horizons and
           been eight initial public offerings so far in         “Since 2000, we’ve all been asking,          long-shot prospects, backing from venture
           2011, coupled with increasingly large-scale       ‘Where are the products?’” says HGS presi-       capitalists hasn’t fully rebounded, hovering
           mergers and acquisitions, according to BIO        dent and CEO H. Thomas Watkins. “Where           more than 25 percent below its 2007 peak.
           Industry Analysis.                                are the translations of those platforms and      Only 9 percent of drug therapies survive
               Navigating tight capital markets over the     science breakthroughs into things that are       clinical trials and go on to receive approval
           past four years has been a tough but man-         going to improve people’s health?”               for market distribution, according to BIO
           ageable challenge, as strategic concentration         HGS is now answering that question by        Industry Analysis.
           of resources has borne fruit. For years, com-     running a tightly focused operation. Early on,       “The capital crisis has taken a real toll
           panies have been scaling back their range of      company researchers built upon discoveries       on this industry,” Watkins says. “So there’s
           drug development programs, concentrating          in proteins and antibodies, and by 2004,         a real question, from an industry stand-
           instead on core competency areas. Some            this biotech player had more than 10 drug        point, whether the innovation and success
           who are strongest in neurology are no longer      development programs. Today, the HGS             that we have had, and for now continue
           seeking cancer treatments, for instance.          pipeline is leaner, with just five drug devel-   to have, will remain possible over the next
               In lieu of blockbusters, biotech firms        opment programs that focus on its special-       generation, with access to capital such a
           are developing niche drugs for hard-to-           ties, especially immunology and oncology.        huge challenge.”
           treat medical conditions, such as autoim-             Revenue streams at HGS haven’t been              Risks and roadblocks notwithstanding,
           mune diseases. Upon receiving regulatory          waiting for Benlysta. Cash flow is gener-        investors are acting on biotech’s bright pros-
S3         approval, companies are now vigorously            ated by monetizing available manufactur-         pects. A late 2010 BIO Industry Analysis
           exploiting every possible commercial ap-          ing capacity for contract work, and from         survey of more than 100 investment pro-
           plication. Result: Multiple revenue streams       government purchasing of raxibamucab, an         fessionals found that more than half believe
           are helping firms to stockpile cash, attract      anti-anthrax drug not yet approved by the        the industry is undervalued. Another 60
           investors and reinvest in programs to             FDA. At the end of the first quarter, HGS        percent said they think it’s a good time to
           design the drugs of tomorrow.                     held $717 million in unrestricted cash and       invest in biotech. Through May, the Amex
               For an example of biotech’s resiliency,       investments available for operations, ac-        Biotechnology Index was up 40 percent
           consider Human Genome Sciences (HGS).             cording to its first-quarter report.             over the prior 12 months, putting it far
           Launched in 1992, HGS initially ran the               Today, HGS’s top priority is to fully com-   ahead of Standard & Poor’s 500 Index (up
           world’s largest gene discovery laboratory;        mercialize Benlysta around the globe; Euro-      23 percent over the same period).
           the company went public in 1993. But              pean Union approval is expected as soon as           “Challenges with regulatory hurdles and
           even as the world buzzed with excitement          this summer. Research is divided between         small companies securing private financing
                                                                                                              remain,” Greenwood says. Even so, he
                                                                                                              adds, “we remain cautiously optimistic.”
                                                                                                                  Looking ahead, biotech leaders hope
           Amex Biotechnology Index Performance, May 2010–2011                                                policymakers will help make the long road
                                                                                                              to market into a less onerous, less costly
                                                                                                              haul. They’re making the case that biotech
                                                                                                              isn’t a one- or two-region industry, but an
                                                                                                              employer of 1.3 million, with potential to
                                                                                                              benefit economies from coast to coast as to-
                                                                                                              day’s strategies give rise to tomorrow’s jobs.
 1,300                                                                                                        Lessons learned from lean, commercially
                                                                                                              focused drug developers could help guide
                                                                                                              the rest of the industry in years ahead.
                                                                                                                  “Biotechnology is paving the way for an
                                                                                                              industrial revolution that moves our economy
                                                                                                              away from a petrochemical-based economy
                                                                                                              to a greener, more cleantech-focused,
                                                                                                              bioprocessing-based economy,” Greenwood
                                                                                                              says. “This could lead to a new homegrown
                                                                                                              value chain, giving every state the opportu-
                                                                                                              nity to sustainably leverage its local biological
     900                                                                                                      resources.”
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