Biotech Values

[DewDiligence]

Headwinds and Tailwinds for Big Pharma’s Profits

If we overlook the small stuff and concentrate on the Big Picture, there are IMO three main trends, of which two are positive:

1. The leading edge of the baby-boom generation is now 61. Positive.

2. Recent events vis-à-vis U.S. patent law, especially the KSR case (#msg-19250528), will make it harder for companies to replace revenue from drugs going off-patent by making minor tweaks. For instance, in the current patent environment it will be difficult for drug companies to get away with a “remade” blockbuster like AZN’s Nexium. Negative.

3. The layoffs upon layoffs that ‘Biopharm investor’ has documented will lift all boats to some degree by allowing drug companies to cut selling costs without losing “share of voice.” Since Big Pharma currently spends more on selling than on R&D, this is a big deal. Positive.