BIOTECH TURNS UP THE HEAT: Biotech is igniting change inpharmaceutical practices

Want to know the difference between biotech and pharmaceutical

communications? Talk to Ben Rudolph, 22, director of PR for DNA

engineering specialist Aptagen. Rudolph's pre-IPO company is currently

looking for investors and corporate partners. 'I want pictures of

smiling lab people doing lab things,' says Rudolph. 'I want to make my

CEO famous.'

Nearly 1,300 companies strong in the US, biotech is to healthcare what

the Internet is to the New York Public Library. Its fortunes may be seen

as precarious at best when compared to those of the more established

pharmaceutical sector, but its potential is virtually unlimited.

In fact it is biotech's link to healthcare that has led to its


The general public is more interested than ever in the science of

healthcare, as stories about the Human Genome Project, cloning and stem

cell research - all topics with biotech components - pop up with

regularity in mainstream publications and on morning talk shows.

All of which explains why partnerships between newcomer biotech and the

more established pharmaceutical and academic sectors have pushed the

limits of development, forcing the old guard to change PR and IR


And while financially beneficial for all parties, the alliances called

for some new communications practices.

Investor relations focus

With the exception of industry giants such as Genentech and Amgen,

biotechs tend to be entrepreneurial companies with only a few products

in development.

Theirs is a constant battle for funding from long-view investors willing

to wait years before products are ready to market, which means PR and IR

are inextricably linked. In short, a biotech's survival can hinge on its

PR and IR success.

According to a recent Ernst & Young report on the biotech industry, more

people are choosing to buy biotech stocks, which are regarded as a

healthy investment when compared to those of the struggling tech sector.

But this demand for stocks translates into a demand for information, and

biotech firms are keen to publicize every step in the development


A biotech company may only have one or two products in development, so

'every time they sneeze it is important,' says Joan Spivak, EVP and

general manager at Edelman. 'There is a sense of urgency in getting the

news out, and in deciding what the news is.'

Large pharmaceutical companies, on the other hand, have many products in

development simultaneously. So if a single product fails to do well in

clinical trials, it is not generally considered an event that must be

reported to shareholders.

But as pharmaceuticals look to biotechs for their technological

expertise and forge partnerships, they are learning that it is in their

interest to release detailed information on the progress of new drugs.

And many are adjusting their PR strategies to keep up with their

press-hungry partners.

For example, Eli Lilly has been developing a sepsis drug, Zovant, with

biotech firm Lonza Biologics. News about the positive clinical results

has been released by Lilly, culminating in March with the news FDA would

speed through the approval process.

But for pharmaceuticals, talking about drugs in development is not

without risks. 'Big pharma live in fear of the FDA,' says Laura Silver,

SVP of Ogilvy PR.

Pharmaceuticals are prohibited from promoting products prior to FDA

approval, although this is a somewhat gray area. 'That doesn't preclude

talking to analysts or making representations at scientific meetings,'

says Michael Durand, EVP of Porter Novelli's healthcare practice. 'But

if a company is too aggressive they can get into hot water with the


Reg FD - legislation requiring companies to adopt a universal approach

to communicating price-sensitive information - only complicates the


If early stage trials are going well, biotechs feel pressure not to

incite the SEC and often want to get the news out to shareholders or VC


Therefore, the partnering companies must agree on which elements of

research are important and safe to release, and which audiences must be


Now that pharmaceutical companies and biotech firms are becoming more

closely linked, pharma is beginning to understand biotech's emphasis on

keeping investors and the SEC happy. Meanwhile, biotechs report that

some pharmaceuticals are loosening up about releasing information. 'In

the past, pharmaceuticals had a stronger arm,' says Theresa McCurry, VP

of life sciences for Hill & Knowlton. 'But now the relationship is more

equal in terms of power, and you are starting to see a lot more


Partnerships between biotechs and academia have also required


The Bayl-Dole Act, which took effect in 1980, forever changed the

relationship between biotech and academia by giving federally funded

universities control over scientific discoveries. This allowed academic

institutions to engage in technology transfer, or the turning over of

discoveries to the commercial sector.

Now the burgeoning biotech industry has forced scientists out of the lab

and in front of the camera. As a result, academic communications teams

have had to cultivate a new business acumen and work with media beyond

the standard scientific journals.

Powerful relationships

A biotech's relationship with a big pharmaceutical player can be good

PR. 'When a biotech has a strong alliance with a pharmaceutical, it

serves as a seal of approval,' says Susan Noonan, president and COO of

Noonan Russo. Investors and analysts know that big pharmaceuticals

thoroughly investigate biotech companies before aligning with them,

which instills confidence.

But biotechs are not the only ones that benefit from the


Pharmaceutical companies' images are often improved as a result. 'It

gives them a cachet,' says Noonan. 'And the products they license from

the biotech industry are sometimes much more exciting than the things

they're doing.'

Investors also appreciate the relationship, viewing it as a

cost-effective way for the pharmaceutical to add to its pipeline without

having to build an entire division. 'The nice arrangement for

pharmaceuticals is that they don't have to invest in infrastructure,'

says Durand.

And drug companies often rely on biotechs to increase their R&D


'Biotechs by nature are incubators for ideas, whereas pharmaceuticals

work more slowly,' says Donna Ramer, managing director of health

sciences at Makovsky. 'In some cases (pharma) have lost the ability to

foster creativity and an entrepreneurial spirit, which is at the heart

of biotech.'

Noonan says that because pharmaceuticals are under increasing pressure

from biotech partners to talk publicly about their early-stage programs,

it serves to boost their profile and makes them an enticing partner for

other biotechs.

As for academia, initial fears about commercial interests tainting

research have been replaced by confidence. 'Some of the discomfort

between academia and business has disappeared,' says Seema Kumar,

director of public affairs for the Whitehead Institute for Biomedical

Research, which is affiliated with MIT and was involved in the Human

Genome Project. 'It has allowed us to say proudly that we have many

corporate collaborations.'

But it remains a tricky relationship, chiefly because of the PR

challenge in keeping the two sectors distinct, as science is ultimately

not a brand.

'The relationship is a collaboration, not a collusion,' says Kumar. 'We

would never want our scientists to endorse a product being tested in a

clinical trial. But they could say something positive about the


Heightened public interest in science has made academic PR tougher as

well. Kumar says analogies are her most effective tool when explaining

complex subjects to the media. During the news cycle for the Human

Genome Project, she compared the map of the human genome to a parts list

for the Boeing 747. She recalls saying, 'This does not mean we know how

it fits together or how the plane flies, but it gives us a way to find

the problems and fix them.'

Difference of opinion

Jeff Richardson, director of global PR for biotech giant Amgen, says

that in the early days, the smaller biotech firms had fewer resources

and had to resort to guerrilla PR to get attention. He thinks that in

the partnering process, pharmaceuticals may have taken notice. 'It

probably led to some downsizing at pharma because they saw how biotech

got visibility for much less money.'

But not everyone says biotech/pharma alliances have led to

communications changes. 'I don't think biotech presents any new

difficulties,' says Kate Robins, Pfizer spokesperson. 'It has always

been important for people to understand the drug discovery and

development process.' Even so, she says public interest in drug

development has increased because of biotech.

One thing for sure, biotech's youth and energy is in demand by

pharmaceuticals as well as the media. 'I have been approached by pharmas

pleading with me to come work for them because they need someone who

understands biotech,' Rudolph says. 'I check ProfNet religiously - every

hour - because people out there are looking for us.'



Amgen/Johnson & Johnson - 1989

Treats anemia related to kidney failure


Centocor/Eli Lilly - 1994

Reduces acute blood-clotting complications for angioplasty patients


Enzon/Rhone-Poulenc Rorer - 1994

Treats acute lymphoblastic leukemia


COR Therapeutics/Schering-Plough - 1998

Treats acute coronary syndrome


Novartis/Ligand Pharmaceuticals - 1998

Prevents rejection of kidney transplants


Hoffman-La Roche/Gilead Sciences - 1999

Treats common strains of influenza

Sources: Biotechnology Industry Organization

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