CHICAGO, July 6 /PRNewswire/ -- Foley & Lardner LLP today released the
results of its first annual Life Sciences Survey which examined key issues and
opportunities facing executives within the life sciences industry. Despite an
anticipated increased impact of Sarbanes-Oxley and tighter regulatory
involvement, the survey reveals that innovation due in part to increased
funding is expected to continue across the board.
"The survey results indicate several unexpected trends," said Steve Bent,
chair of Foley & Lardner's interdepartmental Life Sciences Industry Team and
founder of the firm's life sciences practice. "Life sciences executives are
hopeful for increased funding, but the question is whether the funding will be
enough to offset the expenses of HIPAA, Sarbanes-Oxley and stricter FDA
Below is a brief overview of key findings.
Respondents expect Sarbanes-Oxley will impact life sciences industry more
in 2004 vs. 2003
-- One-third of life sciences companies surveyed feel that Sarbanes-Oxley
disclosure and confidentiality requirements are impacting their
business more this year (30.3%) than last (23.2%), due to a greater
emphasis on corporate governance and an increased awareness of its
Life sciences executives view increased regulatory involvement to have
-- Nearly one fifth (17.8%) of all respondents feel that federal
enforcement action on drug pricing or marketing will have a
significant impact on their business in 2004. One fifth (19.6%) feel
that Congressional follow up on 2003 Medicaid/Medicare reforms will be
the most significant industry development in 2004.
FDA will maintain strict requirements
-- Despite the increase in medical device applications, more than half of
the survey respondents from Foley's study feel the FDA will maintain
the same strict level of approval in 2004 as in 2003 (55.3%). There is
an inconsistency, however, since the FDA has indicated that it will
become stricter in the approval process moving forward.
The clinical trial process continues to complicate drug development
-- 56.3% of industry executives believe the clinical trial process will
stunt pharma development if left unchanged. A majority of respondents
say the clinical trial process continues to have a negative impact on
pharma development. The biggest obstacles include conflicts of
interest and unavailability of subjects.
Venture capital will continue to be an important source of funding
-- Respondents indicated that biotech companies can expect more VC
funding in 2004 (51.7%), a sign that the economy is turning around.
However, the investment expectations of life sciences companies have
yet to be realized fully.
Life sciences innovation will continue across the board
According to Foley & Lardner's survey respondents, life sciences
executives expect the most significant 2004 industry developments to come from
the following three areas:
-- Nanotechnology applications in biomedicine (21.4%)
-- Consolidation in the global pharmaceutical sector (19.6%)
-- Congressional follow-up on 2003 Medicaid/Medicare reforms (19.6%)
Other areas include accessibility of financing for early-stage biotech
(16%), advances toward "personalized medicine" (12.5%) and regulatory policy
on "biological generics" (10.7%). That the respondents were evenly split among
these areas seems to signal both the dynamism and the uncertainty that
characterizes the life sciences sectors.
Biotech spending will increase to protect against terrorism
-- According to 80.3% of survey respondents, biotech spending is on the
rise in response to Homeland Security issues following the events of
the past three years. Despite the fact that Congress has indicated its
willingness to support the "Project BioShield" initiative, questions
remain over where the federal dollars will come from and which
companies will benefit.
Life sciences executives are concerned their R&D is not protected
-- Half of the executives surveyed in the study feel R&D is not safe from
overseas patent infringement (50%). Unfortunately, there is little
companies can do to correct this, aside from working with
international trade representatives, and most companies cannot afford
to have effective lobbying arms outside of their jurisdiction.
Many feel the Blockbuster Drug model still works
-- Even with an outdated approach, more than half of the life sciences
executives surveyed in Foley's study feel the model is still
applicable in today's environment (55.3%). While the industry has
spoken about the need to reevaluate drug development and marketing,
these results are further proof that an economic reorganization of the
pharmaceutical sector is lagging behind consolidation.
In May 2004, Foley & Lardner worked with research firm Estrela Marketing
Solutions to facilitate and analyze the results of a national survey to
measure the attitudes within the life sciences industry.
Estrela Marketing Solutions distributed a survey to 10,000 CEOs and
General Counsel of life sciences companies. The survey was distributed to and
completed by organizations via an interactive Web site. A total of 56 surveys
were returned from life sciences companies.
About Foley & Lardner
Foley & Lardner is a provider of legal counsel to global companies. The
firm's experience encompasses a full range of corporate legal services. Foley
& Lardner's nearly 1,000 attorneys understand today's most complex business
issues including corporate governance and compliance, securities, mergers and
acquisitions, litigation, labor and employment, intellectual property and IP
litigation, and tax. The firm offers total solutions in the automotive, life
sciences, financial services, insurance, health care, energy and sports
industries. The Web site can be found at http://www.foley.com .
SOURCE Foley & Lardner LLP