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To: Casaubon who wrote (100516)	8/7/2009 11:27:11 AM
From: Elroy Jetson	2 Recommendations Respond to of 116555

Research and Development expenditures can easily exceed net profits at a well run company, unless they have given up planning for the future. Chevron earns profits of roughly 2 cents on each Dollar of revenue and spends 7.3 cents of each revenue Dollar to find new oil and gas deposits and other sources of energy dwarf this profit allocation. Spending for exploration is 360% of profits! In contrast pharmaceutical firms spend very little on Research and Development. Even Gilead Pharmaceuticals, a smaller company which spends a far higher percentage on R&D than large pharma firms, spends 37 cents of each revenue Dollar on profit and only 14 cents of each revenue Dollar on Research and Development. Spending for R&D on new drugs is only 38% of profits! If Chevron looked for oil the way Pharma firms look for new drugs, the world would have run dry of petroleum products many decades ago. It's very curious that you think it impossible the allocation of each revenue Dollar to profit must exceed spending on R&D or other type of expenditure. Perhaps you're not familiar with accounting. .

To: Casaubon who wrote (100516)	8/7/2009 12:15:17 PM
From: Elroy Jetson	Respond to of 116555

Research and Development expenditures can easily exceed net profits at a well run company, unless they have given up planning for the future. Chevron earns profits of roughly 2 cents on each Dollar of revenue and spends 7.3 cents of each revenue Dollar to find new oil and gas deposits and other sources of energy. -- Spending for exploration is 360% of profits! In contrast pharmaceutical firms spend very little on Research and Development. Even Gilead Sciences, a smaller pharma company which spends a far higher percentage on R&D than large pharma firms, spends 37 cents of each revenue Dollar on profit and only 14 cents of each revenue Dollar on Research and Development. -- Spending for R&D on new drugs is only 38% of profits! If Chevron looked for new energy the way Pharma firms look for new drugs, the world would have run dry of petroleum products many decades ago. It's very curious you think the allocation of each revenue Dollar to profit must exceed spending on R&D or other type of expenditure. Perhaps you're not familiar with accounting. .

To: Casaubon who wrote (100516)	8/7/2009 12:27:15 PM
From: Elroy Jetson	1 Recommendation Read Replies (1) \| Respond to of 116555

I want to know why you believe pharma spending on R&D has to be smaller than their net profits. Why are so many other American companies able to routinely and consistently pull off something you claim is impossible? .