LARGE CO.can do it better-MYTH---- Small co.do far better.
Large Pharma's role is primarily Marketing, Manufacturing and Distribution.They abdicated Drug
Discovery and Drug Development to Biotechnology years ago. All major innovation has come out
of Biotech, and product is inlicensed to Large Pharma. Almost all biotehnology co's who try to launch a new product (DNDN, SVNT) HAVE LOST @ 90 % OF THEIR MARKET CAP..
VRTX first product was Hep.C--Execution was great (they also brought a top executive from Abbott.
Stock price went down--because COMPETITOR came out with "HOPEFULLY" better product with cure rate of 90% compared to 75-80% for Vertex product.
I owned Vertex as well as competitor--which was bought by Gilead. I also owned Inhibitex which was bought by BMY. Fortunately for me --Inhibitex product killed one patient-so FDA stopped the trials. Luckily I made 150% on Pharmacett and INHX--- and only 20% on Vertex.
Vertex is a fully integrated $13B market cap Co with prior experience in launching their Hep C
product. Size matters ! The CEO,COO, and Marketing team have prior experience. A big +
however; Inivek had a first to market advantage, and with all the above their launch has not
been the success that the Buy Side thought. It's current share price is being driven by it's
new drug for Cystic Fibrosis. BTW, congratulations on your investing success.
I know DNDN and SVNT well. You can be Biotech.--but if your product is not good enough against competition.(REMEMBER the phrase-- Changing Competition).
MDVN and others did DNDN in. SVNT product Krystexxa did not measure up.
The CEO of SVNT was terrible --lost lot of money.
KEY to a Successful BioTech.firm:
Bring in Professional managers.
I analyzed Genentech in 1980 as we were asked to invest 20 mil.$.During our trip-what impressed me most was that they hired Abbott CEO. Genentech had 3 good products--but getting them to market place profitably was not the job of R&D types.
We did invest 20 mil.$.
I always look for top managers experience. I am satisfied with PAUL HUFF's credentials who can do a good job of execution in USA. Not sure about his abilities for OUTSIDE US.
By the way,I own MDVN
I respectfully disagree. For openers, there was only one Genentech. I am in Industry,
and can assure you that the number of feet on the ground (Reps) for statin Co's MRK, PFE,
AZN dwarf what a small Biotech can approximate. The above mentioned Reps have had relatioships with Cardiologists, and Primary Care Doc's for mor than a decade. They can
get right through the door andmarket Vascepa.
Not exactly: Most Biotech failures, 95% are due to safety issues in late stage clinical trials.
That said, I was short DNDN. HGSI, and SVNT. The reasoning was that all three products were flawed. Marketing a new drug regardless of the exciting benefits of Vascepa, is the
most difficult task. A non vertically integrated Biotch Co. launching a new drug.for the first
time is the most challenging of all potential pitfalls.