There is a MYTH floating around that large co.can do it better.
Pfizer had opportunity to buy Warner Lambert(owner of Lipitor) in 1997 for under 30 bil.$--as Pfizer was marketing Lipitor. Pfizer procrastinated. LIPITOR sales in 1997 captured 18% market share of STATINS. Pfizer was happy with marketing Lipitor. Then WYETH(Amer.Home Prod.) almost bought Warner Lambert-owner of Lipitor for 30 bil.$ in 1999. NOW Pfizer top management jumped in and ended up paying 90 bil.$ for WL-Lipitor. PROCRASTINATION.
Smith Cline Beecham--part of GSK--bought Intl.Clinical Lab. in 1988,outbidding Corning Inc. by a margin of 50%.-- Guess what-- They could not make it profitable. Also Corning Inc.divested Quest Diagnostic in 1996--because of similar concerns. But independent QUEST DIAGNOSTIC became profitable in 1999--stock price went up 18 times. Guess what GSK sold ICL and related business to Quest Diagnostic. NOW both businesses are profitable. BIG CO. failed-Small co.succeeded.
Now let's look at Reliant Pharm.--a private co. It hired Joe Zakrzewski and Paul Huff(16 years with Eli Lilly)-- Founder of Reliant was having problems with Reliant for 5 years--nothing big to show for.Joe and Paul launched LOVAZA(Omacor was the name until July,2007) to move sales from ZERO in 2005 to 500 mil.$--then GSK bought Reliant for 1.65 bil.$ on Nov.21,2007. HUFF was still there--JOE had left in May,2007.Huff was VP-marketing/business develop for Reliant. GSK moved sales from 500mil.$ to 920 mil.$ in 2011. OK job.-- NOT what HUFF could have done in Reliant--but FOUNDER/CHAIRMAN--CEO wanted to CASH OUT.
I believe strongly that HUFF-Chief Commercial Officer for Amarin--would do a tremendous job of launching VASCEPA--Sales in 2015 could be above 2,5 billion$ under his leadership for 200mg.trigly.population. Then PFIZER would be willing to pay 6 billion$ for Amarin.
Astra Zeneca can buy Amarin-now--but they have their business develop.--wrongly focussed.They want to enter the Cancer drugs and Diabeties business (ARDEA purchase and Amylin purchase). Hope NEW CEO of ASTRA ZENECA-- is wiser. ONE in Hand is better than 2 in BUSH(Cancer).
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..
Sentiment: Strong Buy
AJAX--you are right that Biotech.co are doing most of the innovations.But failure rate of Biotech.is high also because of Risks. DNDN,SVNT are one of those co.
GILD,MDVN ,REGN are the success stories.
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.
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 can not predict Amarin Stock price in Dec.2012--but I can in 2014 or 2015 after FDA approval for Anchor Trial population of 200mg.
Sales in 2014 = 1.5-2bil.$ Price/share 30-40$/share
Sales in 2015 = 3-4 bil.$ Price/share -- 40-60$/share(if Reduce It study"EARLY" data is Positive.
That is what happened to Warner Lambert.
FYI-- I watched in 1988--Smith Kline Beecham bidding fight for ICL against Corning Inc. I still own shares of Quest Diagnostic.
I look for management in Small co.-- PAUL HUFF is a proven leader. Look at what Amarin had to pay him to join Amarin . He will do a great job.