Incubate in PharmaVoice on Biotech CEOs' Chief Policy Concerns

Incubate executive director John Stanford was recently featured in a PharmaVoice article by lead editor Meagan Parrish on Incubate's survey of early-stage biotech CEOs.

Respondents to Incubate's survey described challenges to the biotech sector and cited a decline in investor interest due to regulatory pressures and other changes in Washington. The respondents' concerns included the Inflation Reduction Act's "pill penalty," tariffs on medicines, NIH funding cuts, and weakened intellectual property protections.

PharmaVoice:

Almost all -- 92% -- expressed concern that investors are moving out of biopharma for lower-risk industries amid policy changes and uncertainty. The rock-bottom level of confidence was no surprise to John Stanford, executive director at Incubate.

"When 9 in 10 CEOs say their investors seem more interested in other sectors, that's a very honest reaction that fits with the anecdotes I’ve gotten from leaders," he said. …

While many Big Pharma CEOs downplayed the broad effect of the IRA's Medicare price negotiations on earnings calls earlier this year, Stanford said he's heard a different message from smaller companies -- especially those fishing for investor interest in small molecule drugs. 

"One CEO from [what's] very visibly a small molecule company told me they're not landing meetings with investors like they used to. And [one investor] told them they should reformulate [their asset] as a biologic," Stanford said. 

About two-thirds of respondents to Incubate's survey said the pill penalty has "already chilled capital formation for small molecule research and development." …

There is, however, momentum to change the rule. The House and Senate have introduced bills that would equalize the eligibility period for small molecule and biologic drugs, and Stanford is optimistic the shift could be implemented as a part of Republicans' reconciliation package this year. 

"For the purposes of reconciliation, it's about figuring out how to make this work so it's neutral to the budget, and I think we're in a good place for that," he said. 

But other Trump-era policies are also dampening CEOs' market confidence. International tariffs are posing a significant threat to securing future funding, according to 88% of the survey's respondents. Sixty-four percent cited "weakened intellectual property rights" as another hurdle for investments.