The Day Novartis Chose Discovery
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The Day Novartis Chose Discovery
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Re: The Day Novartis Chose Discovery
#2A playbook I have instinctively run on the smaller scale, building industrial labs, pursued this as a student, then started decades earlier than Novartis.
Leads to exponential growth, as always.
Would recommend, always willing to repeat, no risk at all.
Experimentation & discovery-R-us.
It was a no-brainer.
Mainly didn't choose anything else.
Re: The Day Novartis Chose Discovery
#3The final section pounding the desk about how terrible ending the program was seems like it is oddly at variance with all the evidence OP had just laid out about how the program wasn't working well anymore and so wasn't actually financially a good idea. It's weird to quote a bunch of things like studies showing that 'internal R&D spending works worse than external for ROI' and then write a big moralizing sermonizing conclusion about how ending internal R&D is bad for profits and how terrible it is there's no 'patient capital' (capital which was plenty available before - what's the theory, investors stopped liking making money? insurance companies with century-long investment horizons ceased to exist? etc).
Re: The Day Novartis Chose Discovery
#4The story about picking an unpopular disease that was easy to test reminds me of why Monsanto went with glyphosate resistance as the first serious GMO target: Trivial testing.
Back when Monsanto started that kind of research, the technology to modify a plant's DNA, and checking the quality and location of the modifications were extremely crude: you'd see the modification inserted into hundreds, if not thousands of locations at once. It was definitely going to make the plant worse at growing at the beginning, and require a lot of work to use traditional breeding to improve the seedstock again. But glyphosate had a huge advantage: Testing whether your new GMO plant has your genes properly activated is trivial. plant all the modified seeds as you can, wait a few days until you have leaves, then spray the whole thing with glyphosate: If the DNA didn't make it, or it's in a place where it doesn't get expressed enough, the plant just dies. No need to use a chipper and spend a ton of money sequencing and checking the specific location of the insertion.
Today the speed and price of genomic pipelines is such that one can attempt a lot more complicated things and get results without risking so many failures, but if you make detecting failure cheap, you end up ahead anyway.
Re: The Day Novartis Chose Discovery
#5This analysis appears to propose that buying-in drug development programs is more financially efficient than developing them in-house. Presumably these bought-in programs are found among smaller biotech companies.
This overview however omits the costs incurred by all those who were not bought-in, i.e. the biotechs funded by VC, etc, who never get bought.
So in terms of the costs of innovation the overall analysis may not support either buying-in or in-house, its just that the risks are differently distributed.
A separate question, and that which appears to have been the foundation of NIBR's erstwhile success, is that in NIBR the scientists and clinicians who innovate new drug candidates remain closely involved in the later stages of drug development. This would be in theory possible with either model, i.e. it would depend more on company culture than the origin of discovery. Acqui-hires that are common in tech for example prioritize continuity of intellectual and technical know-how (as far as I understand it).
Re: The Day Novartis Chose Discovery
#6This analysis appears to propose that buying-in drug development programs is more financially efficient than developing them in-house. Presumably these bought-in programs are found among smaller biotech companies. This overview however omits the costs incurred by all those who were not bought-in, i.e. the biotechs funded by VC, etc, who never get bought. So in terms of the costs of innovation the overall analysis may…
> This overview however omits the costs incurred by all those who were not bought-in, i.e. the biotechs funded by VC, etc, who never get bought.
That’s indeed included in the price paid for the biotechs who were bought-in. The piece mentions that “Between 2016 and 2020, fourteen of the world’s largest pharmaceutical companies spent $577 billion on share buybacks and dividends versus $521 billion on R&D” but doesn’t tell us that they spent even more on M&A.
Re: The Day Novartis Chose Discovery
#7This analysis appears to propose that buying-in drug development programs is more financially efficient than developing them in-house. Presumably these bought-in programs are found among smaller biotech companies. This overview however omits the costs incurred by all those who were not bought-in, i.e. the biotechs funded by VC, etc, who never get bought. So in terms of the costs of innovation the overall analysis may…
> This overview however omits the costs incurred by all those who were not bought-in, i.e. the biotechs funded by VC, etc, who never get bought. That’s indeed included in the price paid for the biotechs who were bought-in. The piece mentions that “Between 2016 and 2020, fourteen of the world’s largest pharmaceutical companies spent $577 billion on share buybacks and dividends versus $521 billion on R&D” but doesn’t t…
I was referring to start-ups that are not acquired. For example a VC may fund a range of biotech companies, but only recoup on those that are acquired. Equally there are many examples of drug-based biotech that simply fail for a range of reasons, losing all the money invested in them.
The point being that the general concept that acquired research may be more efficient compared to in-house research would have to account not only for the failed in-house research, but also for the failed research within companies that are not acquired, or which fail for other reasons.
Re: The Day Novartis Chose Discovery
#8Earlier quoted context omitted.
> This overview however omits the costs incurred by all those who were not bought-in, i.e. the biotechs funded by VC, etc, who never get bought. That’s indeed included in the price paid for the biotechs who were bought-in. The piece mentions that “Between 2016 and 2020, fourteen of the world’s largest pharmaceutical companies spent $577 billion on share buybacks and dividends versus $521 billion on R&D” but doesn’t t…
I was referring to start-ups that are not acquired. For example a VC may fund a range of biotech companies, but only recoup on those that are acquired. Equally there are many examples of drug-based biotech that simply fail for a range of reasons, losing all the money invested in them. The point being that the general concept that acquired research may be more efficient compared to in-house research would have to acco…
> For example a VC may fund a range of biotech companies, but only recoup on those that are acquired.
For those that are acquired they “recoup” much more than their investment. The idea is to get back the total investment in all the funded companies - and the some.
Re: The Day Novartis Chose Discovery
#9Earlier quoted context omitted.
I was referring to start-ups that are not acquired. For example a VC may fund a range of biotech companies, but only recoup on those that are acquired. Equally there are many examples of drug-based biotech that simply fail for a range of reasons, losing all the money invested in them. The point being that the general concept that acquired research may be more efficient compared to in-house research would have to acco…
> For example a VC may fund a range of biotech companies, but only recoup on those that are acquired. For those that are acquired they “recoup” much more than their investment. The idea is to get back the total investment in all the funded companies - and the some.
For an individual VC firm that may be the case, but perhaps not for the whole drug discovery sector?
Re: The Day Novartis Chose Discovery
#10Earlier quoted context omitted.
> For example a VC may fund a range of biotech companies, but only recoup on those that are acquired. For those that are acquired they “recoup” much more than their investment. The idea is to get back the total investment in all the funded companies - and the some.
For an individual VC firm that may be the case, but perhaps not for the whole drug discovery sector?
nature of the beast, high risk early on, cheap, price goes up as derisking occurs. for startups and drugs. risk is priced in. to everything