But as we prepared to analyze and discuss the stalled market – three companies went public last week and performed well. And anecdotal evidence continued to present itself suggesting that many emerging growth companies are now registering confidentially to go public with the SEC under the JOBS Act provision. Also, the acquisitions data demonstrated ongoing momentum in venture-backed strategic sales with the highest average disclosed transaction value since 2006. Here at NVCA we are very cautious about suggesting recoveries or turnarounds, especially in these uncertain times. But as we look to the second half of 2012, we are choosing to be optimistic that it will be a solid year for venture-backed exits. Our companies are growing, innovation has never been more exciting, and we're poised for strong finish.

Yesterday, the U.S. Senate passed S. 3187, the FDA Safety and Innovation Act, by a vote of 92-4, which now goes to President Obama for his signature where he is expected to sign it into law. This is a true win and positive step forward for all stakeholders including industry, patients and the FDA.  S. 3187 will provide more than $6 billion in industry user fees to the FDA over the next 5 years to help fund the agency’s review process for drugs and medical devices.  The bill also creates new user fees for generic drugs and biosimilars and includes a number of provisions that improve the regulatory approval process. 

NVCA’s MedIC Coalition members have worked tirelessly to educate policymakers on the critical issues and challenges facing the U.S. medical innovative ecosystem which made a significant impact on the FDA reform debate and what was ultimately included in the final bill.  As a result, we believe Congress demonstrated a keen understanding of the importance of passing legislation that provides needed changes at FDA to help bring the most advanced and innovative medical breakthroughs to U.S. patients safely and expeditiously.   The final package includes several of MedIC’s priorities including:

• creates a risk-benefit framework for the drug approval process that will provide a consistent and balanced approach to FDA’s decision making;
• expands the accelerated approval process to new medical treatments;
• provides a new pathway for breakthrough therapies;
• provides incentives for antibiotic development;
• improves the FDA’s advisory committee conflict of interest rules;
• clarifies the least burdensome standards for medical devices;
• modifies the De Novo application process; and
• accelerates the appeals process for medical devices.

We would like to thank all those NVCA and MedIC members who worked tirelessly on ensuring that this legislation included these provisions which will help ensure the US competitive position in medical innovation for years to come. 

As we move forward, we need to understand that our work has just started.  We will continue to work with all stakeholders to ensure the new law is implemented as Congress intended and also work together to address the other challenges currently impacting life sciences innovation.

Last night in Boston, the NVCA and Polaris Venture Partners kicked off the 2013 BIO conference by holding a panel discussion for investors, CEOs and journalists on the state of life sciences investing in the United States.  Hosted by Mintz Levin, approximately 70 guests enjoyed some hearty New England clam chowder before sitting down to hear about “What Would Darwin Do?  Adapting to an Evolving Life Sciences Sector.”  Moderated by Bloomberg’s Shannon Pettypiece, the panel comprised six distinguished members of the life sciences ecosystem including:

Terry McGuire, Co-founder & General Partner, Polaris Venture Partners

Darren Carroll, Vice President, Corporate Business Development, Eli Lilly and Company

Patrick Verheyen, Vice President, New Ventures, Johnson & Johnson

Anna Protopapas, Executive VP, Global Business Development, Takeda Pharmaceuticals

Jesse Treu, Partner, Domain Associates

Jonathan Leff, Managing Director, Warburg Pincus

The discussion centered on the challenging environment for life sciences investment over the last several years and what it will take to ensure that the sector is able to emerge from the current down cycle effectively.  There was general acknowledgement that the FDA approval process has been damaging to the investment environment but that there has been considerable progress in this area recently, including the FDA user fee bill poised to pass Congress in the coming days.  The group also discussed the need to make a return for investors and the importance of fair and adequate reimbursement for new therapies and diagnostics.  There was recognition that today innovators must not only produce better medicine but must also reduce healthcare costs.  Most interesting was the overall agreement that the U.S. no longer has the guaranteed leadership position when it comes to life sciences innovation.  Other countries are offering incentives to bring scientists and companies to their shores.  It is imperative that U.S. policy makers avoid disincentives to investment and innovation or our country will surely fall behind others.  One additional concern addressed by the panel was the potential for a gap in leadership at FDA if there is a change in the Administration.

While the challenges loomed large during the discussion, Terry McGuire was right to point out as the closing remark that the people innovating in the life sciences space (and their innovations) have never been better and there remains tremendous promise to bring new drugs and devices to market.  We couldn’t agree more which is why we continue to advocate for public policies that allow investors to do just that.

NVCA Board Chairman Ray Rothrock gave an inspiring keynote address to the teams just before the winner was announced at the White House. As a veteran investor, Ray gave the students sage advice about risk taking and "doing big things" and that they shouldn't be daunted by failure as it is often a prelude to success. His words are sure to run through the minds of these students for years to come. NVCA Board Member Ray Leach of Jumpstart Also participated in a fireside chat with Robin Chase the co-founder of Zipcar and David Biello of the Scientific American.

Thirty new companies have been created around the country as a result of this competition. Several of these companies have won or applied for ARPA-E grants. The winner, NuMat Technologies from Northwestern University is commercializing a new nanomaterial that stores gases at lower pressure and has several promising applications.

Congratulations to all of the teams! Thank you to the many NVCA members that participated in the competition - ARCH Venture, Applied Ventures, Augment Ventures, Braemar Energy Ventures, Claremont Creek Ventures, EnerTech Capital, Jumpstart, Kleiner Perkins Caufield & Byers, Paladin Capital, Silicon Valley Bank and Venrock.

The FAF is now seeking nominations for individuals to serve on the PCC. As they explain in their communications:

Members of the PCC will include users of private company financial statements, including bank lenders, equity investors, and/or sureties; preparers of private company financial statements from a variety of industries and companies of various sizes; and CPA practitioners from national, regional, and local firms.

The NVCA will be participating in the nomination process and encourage our members and all stakeholders of the start-up ecosystem to do the same. The nomination form can be found here. If you have questions, please contact me at Jstaylor@nvca.org. it is important that the venture capital and start-up communities are represented on this important process and standard setting body. We look forward to the work they will do an progress that will be made. The deadline for nominations is June 30, 2012.