Thomas..... I've said similar things in the past myself. The fact is that biotech has moved
closer to pharma than pharma has to biotech..... proteins are now more frequently
routes to small molecule drugs (chemicals, if you like) than they are products in their
own right.
Yes, the lines between pharmas and biotechs have blurred. Yes, the capacity of
pharmas to deal with macromolecules has grown. And, yes, if you're a small biotech
with a screen but little resources and lacking certain capacities, you'd best partner with
an ARQL or a PCOP fast *and* pray hard, or you'll be dead. It's best to find a
company that can do things *for* pharma (INCY or ABSC, for examples, although the
HTS play is getting painful) or that has the brains and resources to play the game better
than pharma (MLNM or NRGN, as examples).
"Play the Game Better". That's the key. Pharma execs know that they can't compete
with small, innovative groups. I won't go into the reasons, but they can't. They will
continue to look to the outside for innovation. I worked for Bayer. They didn't want to
lay down bricks (build infrastructure), because they sensed that it was wiser to source
new stuff from companies that could change directions quickly. Nonetheless, they built
the research center in West Haven. What a joke.
I've worked for a large pharma, and I've worked for biotechs. There is no comparison,
and pharmas will never be innovative on par with little pharma (biotech).
You just need to avoid the companies that are crippled by old business plans,
companies that didn't evolve quickly enough to fit the new world. Go to a biomed
library and get out all volumes of Bio/Technology (now Nature Biotechnology). Sit
down and pick a few companies to track..... TCEL-like companies that have been
around forever and that have failed to thrive. Study them in contrast to Rman's fave,
INCY. INCY completely reinvented itself to fit an opportunity. In doing such, they
provided a model from which all of biotech has profited. The sector now has companies
that map a clear route to the clinic and commercialization, and that try to maximize the
bucks flowing through labs while minimizing burn.
Some of the companies that we call biotechs today will be bidding for Mercks in the
future. The sad part?? If we would have had two years of Binder and then brought
Rathman back, it would be occurring right now. There is absolutely no reason, other
than a lack of biological insight mixed with "invented here" arrogance, that Amgen
should have faltered. I dream of what Amgen could have been if they had hired Patrick
Gage rather than Binder. We'd have a giant of a flag ship. That said, Binder did a great
job with everything other than innovation.
Rather than lose sleep over such statements, I'd suggest that you find the clever
managers, the Levins and the Whitfields, that recognize that pharma has gained
experience in fields that largely led to the demise of old-style biotechs. I say let pharma
have it.
A few small companies will, IMO, break through. I'm determined to own some of them, and to trade on hopes in the interim. Debler and Crossen are, of course, very familiar, old names to anyone who follows the sector. I'd assume that the familiar old names are still around because they successfully serve vested interests. Check out their performance relative to some who contribute to this thread, and sleep soundly?
Rick |
