Biotech Values

[DewDiligence]

Here are some cancer-drug factoids from
today’s NY Times. These ominous stats are
the reason I invest sparingly in cancer
companies. There are simply too many cancer
drugs chasing too few reimbursement dollars.
It’s a mathematical certainty that—no matter
how compelling the science may be—the
overwhelming majority of these drug
candidates will be commercial flops.

http://www.nytimes.com/2006/06/05/business/05drug.html

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About 400 cancer drugs from 178 companies are in clinical trials, according to the Pharmaceutical Research and Manufacturers Association. That is twice the number of drugs in trials for illnesses like Alzheimer's disease and depression and nearly three times as many as for heart attack and stroke.

For patients, the flood of drugs is generally good news because it means a better chance of finding one, or a combination, that will work for them. "From the standpoint of the patients there is never too many," said Dr. Robert J. Motzer, a kidney cancer specialist at Memorial Sloan-Kettering Cancer Center in New York City. Increased competition could also mean that drug companies will put more effort into reducing side effects. In the past, it was considered acceptable for drugs to have noxious side effects because cancer was a fatal disease.

But for the companies, the competition could mean smaller markets for each drug and costlier clinical trials to differentiate a product from its competitors. Competition could also bring down prices, which are now reaching $100,000 a year for some cancer drugs, though overall costs to patients might rise as more drugs are used in combination.

Analysts at Merrill Lynch recently estimated that the market for cancer drugs would double to $50 billion a year in 2010, from $25 billion now. But because of increased competition, the sales potential for each drug would fall 21 percent to 32 percent by then. For many types of cancer, the analysts said, the number of drugs in the final phase of clinical trials exceeds the number already on the market.
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