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Biopharm Development & Manufacturing Aquinox seeks to correct disorders in the blood and immune systems by activating or inhibiting the SHIP-1 (SH2-containing inositol 5-phosphatase) enzyme, which regulates a key blood-cell pathway. The company wants to first introduce its lead drug with an indication for the rare bladder inflammation, Cystitis/Bladder Pain Syndrome, then expand the labeling to COPD. Small beauty to big bonanza — a start-up's dream. Proteon Therapeutics is addressing a common problem; disease mortality and morbidity are often related to secondary conditions rather than the primary disease that often gets the blame. In this case, the condition is dialysis access-site failure, one of the most harmful and potentially deadly complications of kidney disease. Proteon's drug PRT-201 prevents or delays decay of the tissue in the surgically prepared dialysis entry site. The world has long awaited stable oral peptides as a potential replacement for many injected drugs. Will Protagonist Therapeutics be the hero? The company is aiming for the first logical target of opportunity, the GI tract, with one of its new-generation peptides capable of storage and oral delivery. representing traditional funders Knobbe Martens and Delphi, together with innovative funds Poliwogg and Breakout Labs. The panel agreed on one characteristic of early crowdfunding advocates: an idealistic commitment to making investment available to nonelite investors using the increased freedom to communicate opportunities under the JOBS (Jumpstart Our Business Start-ups) Act. One thing crowdfunders share in common with all investment funds, however, is the challenge of raising money from people they don't know. Companies must be ready to spend time communicating their case, as Andrew Merikel of Knobbe Martens suggested: "If you want people to invest in your company, you must invest in them!" "Early Stage Venture Financing: Will Current Trends Continue in 2014?" was moderated by Luke Timmerman, the well-known columnist and vice president of life sciences initiatives at Xconomy. The panel covered a diverse lineup of VCs — Sofinnova, Versant, Third Rock, AbbVie, and 5AM. One common theme: VCs are still unhappy, despite the IPO boom. Even with some top performers in bio, returns for the venture crowd have not been great. Early-stage funding still depends on risk takers with rich pockets, but the multiple mid-stage failures are sinking in; there are fewer dreams, more sobering knowledge. Another problem VCs have these days is with life science entrepreneurs who use the current bull climate for early-stage investment to drive a hard bargain in exchange for funding. "It's actually better for VCs when the market sucks," quipped one of the panelists. Timmerman was brave enough to bring up a political threat to earlystage research and investment, and to life sciences R&D; in general: the Congressional shutdown and near default of the U.S. government, on top of a sharp downward trend in research spending led by the same faction. In a nutshell, what I heard at BIF suggests a message the shutdown faction should heed: The life sciences industry hates politics in general, but it loves the NIH and the industry/government partnership the institutes represent. BIF is a world where large pharma companies come as guests and are mentioned only in passing. On the West Coast, far from the old pharma centers of New Jersey, and now on the East Coast, but with Boston leading, Biopharma dominates all discussion of the industry's future. Still, I believe it's a mistake to count Big Pharma out, as some observers would like to do. People should remember that, in financial terms alone, Biopharma is still spare change in Big Pharma's hip pocket. Although they weren't talking much about big-company money at this year's BIF, it may well be top of the agenda at next year's forum. A subtle but palpable shift back to investor funding appeared in the content of plenary sessions and types of companies in the lineup. PLENARIES IN PLENTITUDE Besides the cancer immunotherapy panel, I attended several of the many plenary sessions, workshops, and roundtables at BIF that got people talking about the wider context and major influences on the business they are there to develop. Particularly topical were the funding-related sessions described in the following: "IPO Frenzy: Are the GoGo Markets Here to Stay?" gave a roundup by an expert panel of venture-fund partners. In the past year, the panel agreed, although life sciences funding continued to decline as a whole, the small-cap sector did fairly well, sparking an influx of large funds and first-time individual investors, while many dedicated investors in the sector remained active. But BIO's Dave Thomas warned initial financing of U.S. biotech start-ups is on a downward track to reach a 15-year low in 2013. None of the IPO panelists were willing to predict a sustained flow of small-cap VC or IPO financing in 2014. But the high-profile flush of cash has some companies asking for money they don't really need yet, some of the panel agreed. Meanwhile, all investors will keep a close eye on further evidence that the companies receiving major infusions, especially on the stock market, can continue to prove their case. Too much negative news in the sector could derail the train of bullish generosity. "Crowdfunding in Healthcare & Biotech: Will It Bridge the Valley of Death?" had a small-company exec from Novita heading a panel 32 LifeScienceLeader.com December 2013