<<Kris Jenner, a former quarterback at Illinois, molecular biologist and surgeon at Johns Hopkins, now manages the T. Rowe Price Health Sciences fund. Last week, he took some time to talk about the resilience of biotechnology stocks, and their prospects. Following are excerpts from the conversation.>>
Kris is manager of the one very respectable bio-founds.
However, he (or author) missed one very significant and unresolved issue: early stage bios and their business plan to be successful and survive future have to transform itself toward ""pharma-bio"" clone.
Bio-sector is too fragmented and non-focused. As Rick had said several times before, too many drugs for limited diseases and pts numbers. For this year I had hope for first step and sign of the consolidation. However, it didn’t come. And I am bit disappointed. CRXA buying CLTR may come into this category, but it is not the best example to judge trend.
This indicated to me that cash infusion didn’t change (at least not yet) bios or CEOs philosophy much. Bio-sector will have, imo, severe competition inside as well outside (pharmas).
Last few years pharma have bad record and results when one count (please, without re-count) successful versus failure (late stage PIII candidates) drugs. So, expense and cost to bring drug to market when up significantly. I think that drug candidates from bios for next two-three years will improve this odds, but still there will be many failures. Main problem is that many bios drugs are for niche market and will not change significantly total market share. This may and probably will hurt total bio-sector capitalization.
Proteo-genomic will help, but drugs from this phase will come at least not for next 5-7 years. So, consolidation and elimination of the bad, doubled, and questionable drugs and programs and forming the base where huge cash will be put in best working condition are THE MUST in my view of the sector future. The sooner the better.
Sector bears and skunks will take any and slightly opportunity to brush bios and compare them with other tech sub-sector, like dot.coms. Unfounded and non-sustainable, but will be part of the sector ups and down.
So, I am urging every bio-freaks, here at SI and elsewhere on public forums, to press and promote sector consolidation when they communicate with bios.
Miljenko |
