Over cocktails, the bus dev team filled me in on their seven meetings, some of which hold real promise to either help us achieve our screening revenue goals for this year or turn into more valuable collaborations. The kick I got out of the bus dev team's enthusiasm gave me the adrenaline rush I needed to shake the sleepiness that was gripping me and drive on through an hour or so of networking (bus dev execs from BiogenIdec, MedImmune, BMS, biotech colleagues and venture folks) followed by dinner with members of my Board and SAB.

When I finally got back to the hotel room at midnight, sleep came quickly... Then up at 6:30 for a quick workout before what I expected (at least according to the calendar!) to be a light day of four meetings and a panel discussion, followed by more receptions.

So much for expectations!!!

Between lengthy phone calls back to the office (hey, still got a business back in San Diego to run!), last-minute preparations for a Board meeting on Wednesday, running into "must-talk-to" people and staying on the existing meeting schedule, I barely had 15 minutes to eat at the food court (lesson learned: at a crowded food court, there's no such thing as line arbitrage... A short line means bad food!).

I did, however, have and hour in the afternoon to walk the convention floor. Amazing! I don't consider myself old, but I do remember a time when the booths at BIO's annual meeting were much, much less impressive and numerous!! Most amazing thing: Innovive's disposable animal caging systems. Best treat: Canada had a Tim Horton's serving up hot coffee and great donuts!!

Panel was fun. A way for some of us to share our experiences raising VC money to fund startups and perhaps help a new generation of entrepreneurs avoid the mistakes we made!!!!

Then on to two great receptions close by and on the water: Cooley Godward Kronish's and the swanky Novartis/MPM/Atlas reception at the Contemporary Art Museum. Again lots of networking with VCs, pharma folks and biotech colleagues. There's no other event on the annual biotech calendar that is as valuable from a schmoozing standpoint. JPMorgan in January is a distant second...

I invited a couple partners from Cooley, a few fellow CEOs, a banker, and a pharma bus dev exec to dinner. While waiting for cabs, the group grows to 12, and we ultimately descend on the restaurant with a force of 20. Great time. Who knew that Ron Cohen, Acorda's CEO, was such a crooner? Backed up quite ably by Ken Moch, former CEO now banker, Cohen serenaded the table with show tunes and doo-wop.

On to bed... Almost 1 a.m!! And worse yet, I have a 4:45 a.m. wakeup call to catch the 7:00 shuttle to LaGuardia for a 10:00 due diligence meeting.

Next year in San Diego, I vow to sleep more during BIO. We'll see....

-- Scott Salka, CEO, Ambit Biosciences

At a Tuesday afternoon session on biotechnology in aquaculture, a representative from HQ Sustainable Maritime Industries described a decidedly non-biotech method for raising exclusively male tilapia fish.

The females carry their eggs in their mouths and so aren't as productive as males. One approach to ensuring that you only raise males is to use hormones. HQ took a different approach. It added to the ponds a predator fish that grows at the same rate as male tilapia. It ate the slower-growing females as well as runts. It's an example of Biomimicry; taking inspiration from nature.

Another presenter pointed out that humans continue to be hunter/gatherers with respect to one protein source -- fish. Interesting point, I thought. Why is that we've embraced farming everywhere but the ocean?

During the Tuesday morning session “On Becoming a Public Company,” Annette Grimaldi, head of life sciences investment banking for New York-based Jeffries and Co., described the ideal biotech IPO candidate. Desirable characteristics included a late-stage novel product that addresses an unmet clinical need, a large market for that novel product to which the company retains all rights, cash in the bank and clearly defined interim milestone goals. Grimaldi also mentioned that such a company does not exist. Her advice for biotechs considering an IPO? "Have a clear sense of self and have the story down before you enter the market. Be able to define what you are and what you want to be when you grow up. Also consider how to create value for the investors.”

The session included other interesting perspectives from operational and legal and execs with first-hand IPO experience. Regarding timing, “You have to do it [hold the IPO] when you don't have to do it," according to Affymax CEO Arlene Morris. Laura Berezin, an attorney with Cooley Godward, advises companies to start socializing early, and getting free advice from lawyers and bankers. In addition, “Have a complete management team. Though you may be tempted to cut corners on this, it’s important to be staffed up well ahead of the IPO." Finally, Michael Lytton, a general partner with Oxford Bioscience Partners, stressed the importance of retaining some of your commercial rights even after your company has been sold.

At Wednesday's session "Drug Safety and PDUFA IV: Overview of Critical Issues in Congress", BIO's VP for government relations, Brent Del Monte, outlined a few "concerns" (his word) with the legislation (Senate Bill S.1082). Consider: this is the first time that economics is entering an equation (Historically the FDA has been concerned with safety and efficacy). A provision of PDUFA IV limits the period of market exclusivity of certain drugs to three months when sales exceed $1 billion. This is also the first time, according to Del Monte, that Congress is going in and making changes to the agreement. And the first time that user fees have been increased by Congress, which, by the way, under the new legislation will account for 70% of the FDA budget for drug approvals -- up from 50%.

But on the plus side, an amendment allowing the sale of baby turtles treated with proven methods for Salmonell has been introduced. Don't ask me why.

The answer, of course, is to grow the company as if none of this matters -- simply building value is the one way to set a company up for either end, or to go it alone. Still, it's hard for a small biotech to ignore what's happening to its brethren and not ponder what's next.

BIO has any number of panel discussions devoted to this topic, or some variation of. In a session this morning, Phil Taub, from law firm Nixon Peabody, displayed to a full audience data on buyouts of public companies in the biotech sector. In 2005, pharma bought 8 public life science firms for a total value of $13B, at an average premium of 38 percent. Biotechs that year bought 10 public firms, costing $6.9B, at an average premium of 37 percent. But things were even better last year for those being bought. In 2006, pharma bought 15 public life science firms for $16.2B at an average premium of 58 percent. Biotech companies bought 17 firms for a total of $8.9B at an average premium of 55 percent.

It's early, but this year things have continued apace. AstraZeneca is buying MedImmune for $15.6B, at a price of $58 per share. While that is a 21 percent premium to MedImmune's close the previous trading day, the stock had been running up for weeks in anticipation of the sale -- the company's trading price was just less than $32 at the end of February. Analysts had predicted the company might garner a $45 share price, so $58 per share suggests that either AZ valued MedImmune a lot differently than the analysts, or that the bidding for MedImmune behind the scenes was particularly fierce. Panicked might be a good word.

For MedImmune shareholders, it's great. And it's been great for a long list of biotechs purchased in the last couple of years. And every company I just mentioned is a public firm, but it begs the question of whether the industry is sitting on an M&A pricing bubble that could change the M&A/IPO debate for private firms. If so, does it matter? Of course -- when that bubble bursts, no one wants to be on the block and getting valued at less than the paltry amounts the public markets are providing today. But there's also really nothing to be done about it. So, ride the wave while it lasts.

Over 10 years, the state would issue $500 million in bonds to pay for capital investments at public institutions and other facilities. It would also spend $25 million a year on direct research grants and offer $25 million annually in tax credits to biotech companies that promise to create jobs in Massachusetts.

The administration, however, has not determined how much money would be dedicated to different areas of research or how much would be available to the private sector.

So it's not clear yet how much of that money would be for stem cell research. But overall, it's meant to make up for the shortfall in NIH funding and spur more commercialization of research.

In addition to the $1 billion in state funding, the plan calls for $250 million in matching funds from the private sector.

Part of the proposal includes the establishment of the Massachusetts Stem Cell Bank, estimated to cost $66 million. The Globe said eight MA hospitals and universities, including Harvard, have already pledged to deposit their stem cell lines. The goal is to make this stem cell bank the biggest in the world. UMass Worcester would receive $38 million for a new RNA interference research center, headed up by Nobel Laureate Craig Mello. (For more details, see here.)

I went to one very full session this morning about all the other industrial chemicals, beyond ethanol, that can be made from biological, renewable sources: propylene glycol (used in a wide range of foods, cosmetics and other products), acrylic acid (used in plastics manufacture), butanol (a potential fuel) and many others.

Cargill, the food and agriculture giant moving into doing more industrial chemicals, announced today that it, in collaboration with Ashland, a chemical and petroleum company, is building a new plant to produce propylene glycol from glycerin, a byproduct of biodiesel production. As more biodiesel is being made, the companies are expecting a glut of glyerin on the market. So it's interesting to see that as a few chemical companies slowly move towards nonpetroleum-based products, it's spawning the production of more chemicals from these "green" sources.

One French company, Metabolic Explorer, was making the case for butanol as a more efficient source of energy than ethanol that can replace diesel and be added to gasoline, though the cost is still too high.

One thing that wasn't discussed was the benefits of nonpetroleum sources for carbon emissions and climate change. Because in the end, that's what really matters, doesn't it?

My colleague Brady Huggett attended the same session and gave a business perspective (I think we posted at the same time!).

More photos after the jump.

There's a lot, actually. There's the bioplastics market, for one -- Cargill is a leader there. (Producing bioplastics also would cut down on U.S. consumption of petroleum by reducing production of petroplastics, by the way.) There's syngas, and there's also butanol, which as a coating and solvent alone addresses a $3.3B market, although it has an upside of potential use as a biofuel.

As Philippe Guinot, vice president of business development at Metabolic Explorer pointed out at the panel, the chemical applications of industrial biotech address a market as large as ethanol. All of which helped his firm go public earlier this year, raising about €52 million (US$70 million) on Euronext. You can view the press release on the IPO here.

The question is how to get the word out? Without Bush mentioning bioplastics or syngas in a State of the Union address, the public hears industrial biotech and thinks just biofuels.

It is clear that investors and entrepreneurs have become savvier about corporate evolution and the role of outsourcing to leverage and protect core competencies. They recognize that, as their nascent companies staffed with a handful of very bright discovery scientists approach milestones requiring increased production of drug and delivery of clinical results, the mere act of investing in internal development skills sets can be daunting and very disruptive to an organization whose mission is still primarily directed toward the discovery of new drugs. Outsourcing development to consulting groups and service organizations has become a logical move for emerging companies to rapidly respond to their pipeline needs and to mitigate risk, while preserving their core mission by remaining focused on discovery.

If you find yourself in that blessed situation of having a product nearing clinical trials, my advice: seek help! If you don’t yet have a pharmaceutical partner, external consultants and outsourcing partners with hands-on experience in manufacturing and development can play a central role in moving the product forward. Evolving from an “idea” company to a “product” company is probably the trickiest transition in the business. The best way to make that transition is to work with people who have already been to “the other side,” who can weave together the various functions (formulation, scale-up, logistics, etc.) and recognize the synergies between them.

-- Michael A. Griffith, CEO and founder, Aptuit Inc.

There’s a rumor going round that Bono made an unannounced visit to the exhibition hall yesterday morning. The Scientist’s director of business development, Jeremy Abbate, told me that Bono was walking around the hall and even visited our exhibition stand. As the full story involves some shameless plugging for a new biotech magazine that we have just launched, I’ll resist from telling it here, and if you want to read more click here). But I’m wondering if the rock star really was at BIO. He didn’t give a speech as far as I can tell, and I remember one BIO in San Francisco where there was a whole host of celebrity lookalikes roaming round the hall. So, can anyone confirm or refute the sighting?

One of the good things about going to BIO is that you get a very quick handle on what the community is thinking and anticipating the most. For me the most talked about subjects so far have been alternative funding methods and the large presence of Malaysia at the conference. Do you agree, or have you spotted other themes emerging at the conference?

So out of a desire to hear other perspectives, I attended a session this morning that was insightfully chaired by Steven Holtzman, CEO of Infinity Pharmaceuticals, on how to structure strategic relationships. His opening presentation was an unabashed comparison of a strategic alliance to a successful marriage, necessarily containing all the same components -- respect, trust, shared values, shared goals, willingness to allow the other to change, desire to see ones’ self and the other succeed. He had then paired four couples representing partnerships from early discovery stage (Novartis/Alnylam) to marketing (Millennium/J&J). And sure enough, there was no doubt that the most successful and inspired partnerships were led by two people that shared a vision and the willingness to achieve it together. There was the couple in an uncomfortable post-honeymoon, still convinced they’d done the right thing, but not really looking one another in the eye anymore. There was the couple that had sort of inherited a relationship to find, much to their pleasure, that it was a thoroughly sound one. The couple that had been on eHarmony for 18 months identifying every characteristic of the perfect partner and when they found them, hightailed it to Las Vegas and were still grinning. And then the comfortable couple that, having renewed their vows in ever more complicated ceremonies, have found that they still rather like one another. All in all a thoroughly enjoyable session with some good insights and atypically candid remarks about how to make an alliance work.

One comment made was that ego is one of the main derailers of a good strategic alliance -- that the collaboration must be able to weather changes in personnel, with a formal and informal structure in place that is focused on the product, on the patient. And that works as a company gets larger and closer to market, as the influence of the CEO on the solvency of the company decreases. But for small biotechs, where your investors have bet the jockey and it's only your perseverance that will yield an ROI, ego is a critical component. What an ask it is of pharma to suspend ego, and yet Steven Holtzman was absolutely right in that these are relationships between people and ego is always disruptive.

And speaking of partnering -- we were wondering why there was no map of the convention center in the BIO program directory. After the fourth partnering session entailing the third trek across the bridge over the exhibition halls in two minutes or less, we concluded it was because they hadn’t actually seen a map of the convention center. Well, at least everyone will leave BIO fitter!

-- Sara Hall, founder, director, president and CEO, Tacere Therapeutics

And unfortunately for the few of us who did come, the panel was so large that by the time they all finished speaking, little time was left for discussion. Another shame, as several of the panel members were clearly at loggerheads about how the industry should be thinking and talking about its position in the greater world stage -- which is just the kind of discussion that needs to happen at convocations like this.

One question is whether biotechnology is transformative or merely another step in the logical progression of science. At one end of spectrum was Boston University’s George Annas, who, quoting ethicist Dan Callahan of The Hastings Center, stated that biotechnology changes not only what we do, but how we think. At the other end was the UK BioIndustry Association's Simon Best, who feels that the industry takes this position at its peril. This dichotomy cried out for further discussion and debate, but none was to be had. (To hear Simon Best talk about this and other topics, go to the Nature podcasts).

After some high-minded talks on corporate responsibility by reps from large companies, Steve Holtzman, co-founder BIO’s ethics committee, brought the discussion back to reality (for biotechs) and laid out what the ethical issues are for companies big and small: how to choose what diseases to tackle, how to go about tackling them while behaving responsibly both toward employees and human subjects, and finally, what to do with the fruits of all their labor -- the accessibility problem.

This last point (which most biotech execs including Holtzman have yet to face) leads to the second central question -- how the industry can operate as a profit center, yet provide what is viewed by most as an entitlement – good health. For more on this, see an earlier post by Nature Network Boston editor Corie Lok.