We review new drugs approved by the FDA in 2004, and the ratio of those developed internally to those that were in-licensed.

Alkermes' success in creating a commercial product out of Genentech's growth hormone has taken it across a fundamental credibility gap all new drug delivery companies face. One result: an extraordinarily high valuation that has permitted it to raise plenty of cash. And it's using these assets--credibility, cash and valuation--to invest in programs which can bring it nearer term revenues and higher margins, in terms of new, accelerated, or risk-sharing deals. Indeed, it's even treating its current net-loss position as an asset, spending heavily now--which its profitable competitors can't, given their valuation-sensitive earnings constraints--and even signing complex deals to take its partners' expenses onto its own P&L, reimbursing itself with equity and downstream milestones. Moreover, it's shown itself, as in its acquisition of Advanced Inhalation Research, willing to dramatically expand its portfolio of technologies with work done on the outside. Alkermes also wants to develop products for its own account, though its strategy for commercializing them, while maintaining a strong delivery technology base, is unclear.

FASB and the SEC, anxious to harmonize US accounting practices and clarify corporate earnings filings, are proposing reporting changes which will further beleaguer already desperate medical start-ups and rock large company growth plans. They're already tightening the rules on write-offs for in-process R&D following acquisitions and they've proposed eliminating both pooling of interest mergers and off-P&L financing techniques, like SWORDs and SPARCs.

In recent years, insights into the molecular biology of pain have given drug developers new targets, and companies are thronging to the field in the hope of developing side-effect free, non-narcotic analgesics. With the aim of developing novel drugs for pain based on novel ion channels, McGill University has spun-off Antalium Inc.