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Falling market push small BIOTECH R&D alliances

Le Temps, 23 January 2008

FINANCE Le Temps Finance I Article The market downturn will push small biotech R&D into alliances. The end of the prospect of development of young companies by IPO will result in the pharmaceutical sector consolidation wave.
Willy Boder Wednesday, January 23, 2008 "The window wide open in 2006-2007 abruptly closed.

Maybe he will have to wait two years to see it open again r "Hervé de Kergrohen, President of BioData '; until the effects of the storm ends on the sector of biotech. One of first consequences is closing the "IPO window", the end of the ambitions to go public to value a young company and recover research costs tens of millions of francs accumulated during the start-up years. But without stock market and without financing from venture capital, increasingly hard to find in Europe, the logical solution for a company're running research budget will be flowing into the arms of a large company .

Price pressure "The pressure on the sales price will be very strong" says Hervé Kergrohen.

The small biotech companies will no longer hold a candle to the pharmaceutical multinationals "This problem largely fueled conversations in the corridors of BioData, annual meeting, Geneva between companies biotechnology and the world of finance. The ranks of the latter were more sparse than usual. The Stock Exchange crisis naturally selected number of financial front of their computer screens. The time is more ripe to identify and mitigate risk, rather to take new investments in companies that are often not profitable for several years.

Calls from the head of the big pharmaceutical companies are not immediate. "Today we must think about the place where good molecule is better developed," says François Conquet, Merck (MRK) Serono (SEO.VX), a company that has deep pockets for alliances. Stéphane Bancel, CEO of bioMérieux quoted by AFP, said that the fall StEx makes interesting companies to be acquired".

Forty managers of small businesses have a bad job against heart presenting with the required dynamism, their society and its portfolio of promising drugs in BioData.

The hundreds participants present Tuesday consoled themselves by wearing the medium and long term view. "The critical mass of the biotechnology industry in Europe is reached. The longterm outlook is good, "says Gilles Nobécourt, the bank's partner Edmond de Rothschild (RLD.S).

"We'll just have patience to see crystallize gains," said Ulrich Kinzel, director Nomura (' 716.T) Code Securities. Still, "the fear of stagflation caused by the credit crisis in the US, shaken markets," according to Hervé Kergrohen. Biotechnolgy companies have largely head out of the water Thanks to agreements that allow them to "wait and see". This is the case of the German company MorphoSys, which concluded there was a month, a collaboration with Novartis (NOVN.VX) worth $ 600 million for antibodies. "Our position is excellent, says Simon Moroney, CEO.

Novartis has the right to a number of therapeutic targets in the range of 10 to 100, especially in oncology and in the care system ';. In Central Nervous System Sector "20 threatened societies". Twenty small businesses British biotechnology will be in trouble 'cause of the crisis of Markets. They will probably look for cheap R&D partnerships "predicts Jerry Randall, financial manager of Sinclair, a UK company specializing in dermatology.

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