Wyeth: Trouble's Teachings
Executive Summary
Recent news that long-term hormone-replacement therapy was doing more harm than good slashed Wyeth's valuation by 25%-$15 billion-overnight, even though the company maintains there was "nothing shocking" in the study. Hormones had been its top-selling product franchise. It's another hard knock for a company that only just settled a nationwide class-action suit, to the tune of $13.2 billion, over anti-obesity drugs fen-phen and Redux. Wyeth has also had well-publicized troubles with manufacturing. But Wyeth is stronger than it was just a few years ago, partly because acquisitions boosted research productivity but also because it learned from hardship. The company is quicker to face up to problems and deal with them. It's also more aware of the ramifications of developing biological drugs, especially in terms of production. Wyeth should be able to continue growing without resorting to M&A, if it can learn to be as active in prosperity as it has learned to be through adversity.
You may also be interested in...
From Generics to Brands: Barr's Women's Health Franchise
Barr remains committed to building a leading women's health franchise even as it encounters setbacks, big and small, most recently in the FDA's rejection of its application for over-the-counter status for its emergency contraceptive, Plan B. Even more problematic is the ongoing turmoil in the hormone replacement therapy markets. It recently launched its first proprietary product, indicating its skill in getting an NDA drug through the FDA and newly acquired marketing savvy.
From Generics to Brands: Barr's Women's Health Franchise
Barr remains committed to building a leading women's health franchise even as it encounters setbacks, big and small, most recently in the FDA's rejection of its application for over-the-counter status for its emergency contraceptive, Plan B. Even more problematic is the ongoing turmoil in the hormone replacement therapy markets. It recently launched its first proprietary product, indicating its skill in getting an NDA drug through the FDA and newly acquired marketing savvy.
Cytyc's Second Child: Dressed Alike, But Very Different
Cytyc's purchase a year ago of Pro-Duct Health added a product--a ductal lavage catheter--around which it could leverage the clinical and marketing capabilities it had constructed to commercialize ThinPrep, its liquid cytology sample collection platform now used in roughly 60% of Pap smear applications. But Cytyc is facing a much different set of challenges with ductal lavage. Physicians and patients are not used to undergoing a periodic ctyologic screening routine equivalent to Pap. Also, it may take a combination of ductal lavage, biomarkers, and protein expression patterns to distinguish which high-risk women with mildly atypical epithelial ductal cells will get cancer. Cytyc had intended to obtain a molecular marker development capability through the acquisition of Digene Corp., but the FTC shot down the deal. Unless and until it develops internal R&D, it could remain an opportunistic acquirer, like a specialty pharma company perpetually searching for an encore but holding few chips with which to outbid other players.