Foley & Lardner Survey Uncovers Life Sciences Industry Trends

Increased Regulatory Involvement, S-OX Expected to Impact the Industry

Jul 06, 2004, 01:00 ET from Foley & Lardner LLP

    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
 significant impact
      -- 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
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 & 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
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