Election Year - A Good Time to Get Back in the Saddle

2007 was a very busy year for me and this blog suffered. No more.

We start 2007 with the potential for more change in the industry than probably any previous year. FDA is massively underfunded and so far behind it is truly worrying The New York Times; most major pharma companies are closing plants and laying off staff; significant issues are being raised regarding drug trials and drug promotion, and the industry is at an all time low in terms of public perception.

At the same time the political trends appear to be shifting towards the Democrats, and all the candidates from that party are lauding their credentials as someone who will end special interest politics in Washington - especially the drug companies. This is a risky time to be in the drug business.

The business shifts occurring in pharma are seismic, and we are only just getting the initial tremors. I am convinced that we are about to see a major transformation in the ways in which pharma does business and the ways the industry is structured. The steady increase in the licensing business is evidence of the shift away from in-house R&D to in-licensed R&D. It can only be a matter of time before one of the big pharma companies off-loads its entire R&D function. Divesting large divisions that were previously thought to be core has been a trend in other industries for some time and I think it is only the higher margins of the pharma industry that have prevented it occurring here too.

I'm off to the BioPartnering North America Conference this weekend (I do business development consultancy for a couple of small biotech companies). There are going to be over 500 companies at the meeting, with around 700 products being represented - and this is one of the smaller partnering meetings. R&D is alive and well - but not in big pharma, where the in-licensing teams are typically talking to over 100 potential partners at any given time. The Hollywood model is coming and soon we shall see at least one top-20 company shift entirely to a D&M model (development and marketing), and a new category of company will have been formed.