Peter, I think my problem with it is fixing a value on that R&D.
If it costs you $100MM to build a building right now, chances are that you can build another building just like it for $100MM, too - and both buildings will be worth $100MM. But, if you spend $100MM to discover and commercialize Epogen, there isn't much chance that you can duplicate that success with the next $100MM.
According to the odds, most of the time you spend $100MM you get next to nothing in terms of an asset. On the other hand, if your $100MM gets you an approved treatment, then the asset is worth far more than your expensed R&D.
I think I agree with the quality of earnings view that you wrote about. But I don't think the issue needs an accounting change, since, as you point out, the market seems to adjust for that (or not - as always).
It hasn't been two days yet, so my brain hasn't had a chance to fully come around. |
