STOCKWATCH: Pharma reptiles find new skins but risk auto-cannibalism
This article was originally published in Scrip
Executive Summary
Plato, among other ancient sages, described the ouroboros, a mythical snake which ate its own tail. The ouroboros represents cyclicality, eternal return and re-creation. For the pharmaceutical industry, its own symbolic snake traditionally depicted wound round a staff or goblet, ouroboros means lifecycle management, maximizing the return on investment over a drug lifetime that extends beyond patent expiry. But now, as illustrated by the earnings numbers released in the week beginning 22 July from Roche, Shire, and Biogen Idec, pharma is adopting another reptilian characteristic, easing its existing franchises into a new, larger skin. Achieving the transformation successfully, though, means avoiding product cannibalization.
You may also be interested in...
Stock Watch: Risk And The Pharmaceutical Discount Rate
In contrast to the SEC’s view that public companies’ regulatory filings give investors all the information needed to make an investment decision, the discount rate used to value a company may not reflect all its risks.
Stock Watch: Pharma Businesses That Leave Consumer Behind
Healthcare conglomerates that divorce consumer, animal health and even generics businesses from their pure-play branded pharmaceutical groups could leave a less diversified and riskier sector in uncertain times. But the advantages are apparent.
Stock Watch: Acadia And Amylyx Trial Failures Were No Shock
The overused phrase ‘pipeline in a product’ translates to ‘disappointment in a product’ when the number of indications in the pipeline contracts towards zero.