Reliant: The Expensive Opportunities in Primary Care
Reliant's business model -- building a new company to sell the primary care products that looked too puny for Big Pharma -- posed management and financing challenges that almost killed the company. It's turned around, thanks to new management and a product in a hot area-lipids. But what's really got its investors excited: the opportunities posed by late-stage primary-care failures at Big Pharmas, who are now looking for market-proven products. And those Big Pharmas can help pay the acquisition cost by dismantling the costly infrastructure created to prove the product's value in the first place.
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Best Laid Plans: Pfizer's Torcetrapib Tanks
Pfizer's decision to discontinue the development of it's Phase III high-density lipoprotein-boosting torcetrapib in early December leaves the Big Pharma with little choice but to accelerate its restructuring plans and start spending some of its estimated $34 billion cash reserves to bolster its pipeline.
Endo: Accessing Primary Care through Specialist Marketing
Endo believes its specialist approach to pain management is key to eventually winning over a respectable market share in primary care, given that it can successfully differentiate Frova, the sixth-in-class migraine treatment it licensed from Vernalis in July 2004. Skeptics point to the failure of previous owners of Frova to gain the drug any primary care notice since its launch in mid-2002. Endo chairman and CEO Carol Ammon contends that the company can inexpensively exploit the unique characteristics of the drug in the medical community and succeed where others have failed through a singular focus on specialist medicine that she claims as its bailiwick.
Enzon: The Perils of Profitability
Profitable but pipeline-poor Enzon tried to build a road back to R&D. But its value-oriented investors wouldn't support the spending ambitions, particularly as their royalty income declined. Enzon tried to merge with NPS, a pipeline-rich unprofitable company, hoping to transform its conservative shareholder base for one looking for biopharma-type home runs--but there too ran smack into the immovable force of investor inertia.