I had the pleasure of interviewing David Pinniger, the head of Polar Capital‘s biotech fund, the other day. The interview covered a range of topics, from his views on the current M&A market and valuations to his view on the what opportunities lie ahead for the sector - and there are many.

When we got to talking about some of the challenges facing the sector, I asked him what he thought were the greatest fears for biotechs - what could really herald a decline. Below are the 4 he highlighted.

1) Market Reversal.

We’ve been enjoying a long bull run on capital markets and the appetite for biotech business is good. Were there to be a substantial decline in the health of overall economies - or god forbid another 2008 style crash- risk capital would dry up and spell nothing but bad news for biotech.

2) Regulation. Regulation. Regulation

The general consensus, at least in the UK, seems to be that the regulatory climate is good and positive for the industry. The fear is this may change with the fickleness of politicians and policy makers and could lead to dreadful consequences for the industry.

3) Reimbursement and Pricing

With the emphasis from reimbursers on value and cost effectiveness, biotechs fear their drugs may simply be too expensive when viewed through lens of joe public - it pricks their sense of fair play. The shifting focus of reimbursers could spell disaster for many biotechs, as it could potentially lead to a cultural/social/political sense that biotech companies are taking liberties at the expense of others on price, making them vulnerable to some kind of backlash.

4) Image

The biotech and pharma industry is viewed by joe public with distrust, suspicion and sometimes disgust. It’s on a par with the tobacco industry in terms of perception. Clearly, this is a huge problem for the industry, and if it isn’t addressed will result in a severe hampering of abilities to deliver results.

David’s full interview will be in the December edition of Drugs and Dealers. Subscribe for free now to ensure you get your copy.

Polar Capital will be a speaker Biotech and Money London. Download the brochure for details of this and all the sessions.