Overheard at JP Morgan's 25th Health Care Conference: Making Up for Lost Drugs: Pharma Attempts to Appease Investors
The annual JP Morgan conference has always been a stage for reviewing new solutions to the basic business-model problem of biotechnology. But as Big Pharma's troubles have grown, the conference has also become a showcase for large drug company problems. The quick fix: keep shareholders in the stocks by returning cash to them. Medium term: adopt one of four basic business models. Longer term: disaggregate.
You may also be interested in...
Just one year ago, Bristol-Myers Squibb's days as an independent entity seemed numbered. But thanks to the resolution of the Plavix crisis, innovative deal-making, and an R&D pipeline surging with specialty-focused products, the company is now thriving. In a free-wheeling Q&A, Bristol's R&D gurus, Francis Cuss and Elliott Sigal, discuss the need for a new kind of biopharma that is specialty-focused and technology agnostic.
Israeli biotech is hot -- lots of ideas and lots of entrepreneurs. But the industry is chronically short of management and venture money. For the latter, companies have turned to Israel's recently deregulated stock market.
While pharma needs to access biotech's innovation, biotechs and their investors are unwilling to cede late-stage control. This is a recipe for stalemate: the industry needs different partnership structures which fully pay biotech for innovation (with royalties of 20% or more) and leave early-stage development in their hands, while allowing Big Pharma to do the later-stage development and commercialization. To afford these deals, however, Pharma needs to cut their own spending on innovation.