An extract from a WSJ article predicting slower earnings growth for the big pharmas:
interactive.wsj.com
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In the long term, the report predicts a massive shift in how drugs are developed and marketed, away from the current blockbuster-oriented approach toward more-segmented product lines. Driving this change is the continuing revolution in genetics research. In the past, the pharmaceutical industry has had a Hollywood-style focus on finding a handful of huge sellers and relentlessly marketing them to as broad a patient population as possible.
In the future, the more rapid pace of genetic advances coupled with automated chemistry techniques could eliminate bottlenecks in identifying new medicines and allow drug companies to develop numerous drugs targeted to much more specific segments of the population. For example, instead of one class of asthma drug for everyone with the disease, there may be five or six classes of asthma drugs, each one targeted to only certain classes of asthmatics; patients would take a gene test to determine which drug is most likely to work for them.
"We are moving from having pretty good solutions for large groups of people, to great solutions for smaller groups of people," said Ms. Sondhi. "It is manifestly clear this is coming."
Drug companies that plan for and adapt to these changes will prosper, while others that remain stubbornly wedded to the old blockbuster mentality will run into trouble, she predicts.
QTRN has recently made some interesting preliminary moves down this road - definitely a stock to watch.
go2net.newsalert.com
I guess Herceptin is the first real example of this sort of drug. Discouraging to read in the book Her-2 (which I urge people to read) that it would probably not have received the go-ahead today.
If niche drugs become increasingly more important, this should benefit some of the smaller biotechs. Unfortunately it ain't much cheaper to develop and get approval for a niche drug than for a blockbuster, so this move is going to run head-on into the developing crisis in drug costs.
Peter |
