BIO Europe was, yet again, an excellent conference for Lacerta Bio. Having the US election on television screens in the Exhibition Hall made for some surreal moments and discussions. Not a single meeting on Wednesday went without some discussion about the election results.
As Americans, we perhaps we do not appreciate how important our elections are to Europeans and the Rest of the World.
Anyway, what did we learn during our week in Cologne?
Market Mismatches (Still) Persist
Mismatches between company perceived asset value (CPAV) and industry recognized value (IRV) is still pervasive.
We still see many companies with admittedly interesting technologies try to force prospective partners to in-license their assets because they have a high CPAV, while the industry has a low IRV.
Now it is possible that the conventional industry, broadly speaking, is entirely wrong. In which case, in the absence of major adjustments to asset valuation, a change in indication and/or a change in geography (finding partners outside the major markets) may be increase the probability of out-licensing success.
There may also be examples where both CPAV and IRV are low. Conceptually, there is a general agreement on valuation and terms. However, finding the right partner can still be a challenge if their interests lie in seeking and signing licenses for assets with greater upside.
What if the CPAV is low, but the IRV is high? We are not sure this ever happens, but it is possible that a company grossly undervalues their asset. A deal may be quickly signed if the offer seems too good to be true, but someone will have to perform some forensic modeling to understand what went wrong.
Our meetings in Cologne reminded us that a story demonstrating unmet need, revenue potential, and reimbursement is not enough. Companies and their investors must consider what the industry wants in terms of indication and stage of development.
And, if there is a mismatch, changes may have to be made to the strategy underlying that asset in order to improve the probability of a successful license.
Now imagine the scenario where a CEO has raised capital, advanced an asset or two, and is now trying to find a partner. Imagine further that the asset is at a stage of development or in an indication which is currently out of vogue. What does that CEO do know? What do the investors do?
It is a challenging situation without easy answers, but yet we see this scenario play out a little too often, in our opinion.
Don’t Stay Home
There has been a movement to move partnering to digital platforms. The rationale is that digital platforms save time and money by eliminating the need for travel. Plus, they can increase the number of opportunities for both in- and out-licensing.
Such platforms not only have text-based asset descriptions, but some can store presentations, videos, and provide mechanisms for making email and video connections.
Digital partnering platforms without an associated conference definitely have their place in our industry. They are a great tool for rapidly finding a bolus of in-licensing opportunities, for example. Competitive information can also be gleaned from these platforms. For cash-strapped companies, online out-licensing can be a very good option.
Video conferencing has been touted as a substitute for face to face meetings. So the idea of combining databases to source assets with video conferencing for communications sounds appealing, especially for companies on a tight travel budget.
Yet, video conferencing suffers from a number of disadvantages versus face to face meetings. For example, participants in video conferencing tend to be influenced more by the likeability of the speaker than by the quality of the arguments presented while the opposite is true for face to face meetings.
Video also places a variety of cognitive demands on participants, i.e., a greater concern for appearance, which can distract from information processing.
Video definitely has its place, especially between individuals with an already established relationship. But for a first-time meeting, nothing beats a face-to-face meeting.
This explains why attendance at BIO Europe continues to grow, and why some companies will go as far as living on a catamaran or in a dodgy apartment in the Tenderloin for a week in January to attend the various San Francisco conferences.
It’s simply because there is nothing like developing a personal relationship with a potential partner, client, customer, or service provider.
And it is not only the scheduled meetings which have value (of which there are plenty). The chance meetings with old friends and colleagues in a hallway or reception help reinforce and deepen relationships, which in turn help propel our businesses forward.
We recognize this is rather obvious for many readers. Yet we still see conference attendees huddled incorners or sitting at tables, far away from the action in the partnering areas or exhibitions. We also note that conferences become excuses to travel and see other cities, without active participation in the conferences themselves.
We have a better idea…hop on a plane, put the phone away, and interact with us.
Size Matters
BIO Europe (especially the Fall edition) is not the largest, nor the cheapest partnering conference in our industry. Yet, attendance continues to grow, conference satisfaction tends to be very high, and many people return year after year.
Why is that?
It was pointed out to us that BIO Europe has a level of “openness” which other conferences lack. That is true, and a large part of that openness is driven by the itinerary itself.
We are all in one large hall, so impromptu meetings and conversations are plentiful. We travel together, eat and drink (…and drink…) together, and relax together.
This is possible, in part, because of the size of the conference. Can a conference with 10,000 attendees do this? Maybe if the receptions were held in a football stadium (preferably one with a roof). Else, probably not, although the receptions at BIO in San Diego will mimic this dynamic to a certain degree.
Ultimately, the value of this conference is in the multiplicity of food & drink-fueled formal and informal meetings in a smaller, tightly-knit environment which make this event so special.
This is in sharp contrast to the January conferences in San Francisco. That week can be a challenge to navigate, primarily because the events and attendees are scattered. It takes a signficant effort to achieve the same value there compared to BIO Europe.
Having said that, our travels will next take us to the Biotech Showcase in San Francisco in January. We will be holding meetings in the Hilton, the Hotel Fusion, the Fun Run, and all points in between.
Will you be there?