The Drug Industry's Real Post-Genomics Problem: Financing the Pipeline
This article was originally published in Start Up
At iO Pharmaceuticals, two former Genentech executives aim to do for Big Pharma what Genentech, with its creative financing techniques, did for itself. By setting up a clinical development company, they plan to create off-P&L financing structures which will allow drug companies to develop more products without decreasing earnings.
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Drug companies always want to develop more drugs than they have funds for and a variety of companies have sprung up to offer financing alternatives for them. One company, Collabra, tried to take the enormously Genentech model and apply it to Big Pharma. It didn't work, and the reasons are instructive.
It is a world, at least the US corner of it, in which any common understanding of drug value is confused by opposing incentives – to opacity and transparency, to looking at benefit broadly or narrowly, long-term or short-term: value, in short, to whom?
Merck and UnitedHealth's Optum group have partnered to explore various value constructs.