Most of the biotech companies sold themselves as being better, more nimble, more efficient, etc. at drug discovery than their bigger counterparts. And that is true: It doesn't take huge resources for drug discovery, and the smaller guys have a better idea. Actually, make that HAD a better idea. Because most of these smaller players were started between the mid '80s and mid '90s, when big pharma still hadn't fully embraced modern drug discovery/design ideas. But since that time, big pharma HAS come on board, and I would say that the small guys can't honestly claim any major advantages at this point.
Well, they can claim one advantage: As smaller entities, they can be more careful in who they hire, and don't usually have to deal with many of the turf war infrastructure issues that continue to plague the big guys (as it always has been and as it will always be). Of course, as the small guys get bigger, that advantage gets whittled away. Vertex is surely big enough now that they can't claim this type of superiority anymore. (The horror stories I've recently out of Vertex on both coasts surely rival anything I have seen in big pharma).
OK, so now the small guys, who got funding on the basis of a better idea, are now basically toiling in the same garden, with the same tools, as the big guys. So where is their edge? Well, they have smaller market capitalization, so if they have a hit, it represents a much larger boost in value of the company. That will appeal to gamblers.
Another thing to appreciate: The small guys sold themselves as superior DISCOVERERS of drug candidates. Probably true at one time, maybe so maybe not now. Even if we accept that they are better at it, the truth today is: EVERYONE is good at drug DISCOVERY. High throughput methods, along with the universal adoption of the more modern techiques once principally the domain of the smaller guys, has seen to that. So everyone can produce more candidates than they can handle. Read that again: EVERYONE can produce more candidates than they can handle. That's no longer the rate limiting step. Where's the bottleneck: Development. And that's a VERY EXPENSIVE nut to crack. The small guys can't afford it. The small guys can't win this race. They aren't better at it, they can't do it much more cheaply. Nope, this race goes to the competitor with the most money, with the biggest and best infrastructure. And that's big pharma. You can't get around that. There are no magic bullets. That's fact.
The small guys can try to play on the same field. They can whittle down their dozens of candidates to one or two, place their bet on those, and try to develop them. If they win, they (and you dear stockholder) win big. But if the dice don't fly their way, and that's a very possible scenario, then they wind up out of time and out of cash, probably purchased for intellectual property at firesale prices.
Interesting report bio - I'm curious about the "horror stories" you mentioned in part 1. There is a word missing in your bracketed statement: You said: "(the horror stories I've recently [?????] out of Vertex on both coasts rival anything I have seen in big Pharma).
That's a key word...."seen", "heard", "did", which is it?
And, can you provide some clue as to what these "horrors" might be?