If the biotech industry hopes to feel better in 2010, it needs a new drug—and a new way to develop it.

With the capital market remaining crimped, life-sciences industry leaders are talking about new models that not only lower costs, but, more specifically, change the way drugs are discovered, developed, brought to market, and delivered to patients.

Those new models are partly being driven by health care reform, if or when Congress passes legislation. But they also reflect rising impatience by investors for the traditional way of doing things.

“There is plenty of money for everything everyone wants to do,” Steven Burrill, founder of San Francisco-based life-sciences merchant bank Burrill & Co., said at a November event at the University of California, San Francisco. “But it’s an inefficient system.”

Instead of trying to find the next Genentech, the South San Francisco biotech powerhouse founded from technology developed at UCSF, Burrill said the focus of wannabe entrepreneurs now must be finding a patient need first, then developing a drug.

“Does every idea deserve funding?” Burrill said. “That may not be a valid assumption.”

Investors are also showing interest in technology that can help early-stage companies reach a go/no-go decision on drugs faster.

Still, Big Pharma remains hungry for new drugs and sees biotech as a key channel for obtaining them. And investment, though tight, remains available to companies with solid leadership, solid science, and a solid business model.

Companies that can’t meet those standards may turn into acquisition fodder.

“2010 could be good for dealmaking,” said David Collier, a managing director with CMEA Capital in San Francisco.

Biotech entrepreneurship may get a spike from Genentech, the granddaddy of the Bay Area biotech industry. The golden handcuffs of retention bonuses are taken off Genentech employees in March—a year after the company’s $47 billion acquisition by Swiss drugmaker the Roche Group—and more managers and scientists from the South San Francisco company are expected to lead—or seed—startups.

Among those who already have left Genentech is Susan Desmond-Hellmann, who took over in August as chancellor of UCSF. Desmond-Hellmann is reformulating the college with a more businesslike approach.

If the life-sciences industry finds a way to fund innovation in a weak funding cycle, Desmond-Hellmann said at the same event with Burrill, it’s going to be in the San Francisco Bay Area.

“We’re here in the land of the secret sauce,” she said. “We’re in the land where people try, fail, get up, and do it all over again.”