For 2001, A Top Eleven List
2001 was a mixed year for health-care manufacturers, characterized by real advances in cardiac device therapies, the maturing of the biotech and generics sectors, and the continued embattlement of Big Pharma. Here's the staff of IN VIVO's list of the most important trends.
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Incyte Genomics Inc., the creator of the database model and practically the ur-platform company, has suddenly decided to turn into a drug discovery company--changing top management to do so. Other firms that decided years ago to leverage genetic information to create drugs have far higher valuations than Incyte--indeed biotechs reporting product revenues get valuation multiples on sales that are twice as high as those platform companies command --and about triple the multiples that Big Pharma receives on its sales.
The once clear distinction between discovery-based biotechs and specialty in-licensing companies is dissolving, as emphasis increases on ability to deliver margins and growth. Cephalon's acquisition of France's Group Lafon, for example, gives Cephalon--for a steep price--a foothold in one of Europe's largest markets, sales and marketing infrastructure, and the opportunity to capture hefty royalties that Cephalon has been paying to Lafon for rights to a key product.
Results of two recent studies reported at this year's American Heart Association meeting favor devices over therapeutics in treating certain cardiovascular conditions. The PRESTO trial results were the equivalent of a dodged bullet for stent companies; it showed no benefit from the drug Tranilast, a result which leaves intact the supposition that drug-eluting stents are the best restenosis treatment. And another major trial found that implantable LVADs have superior results in treatment patients with chronic end-stage heart failure.