Biotech Values

[DewDiligence]

Musings on ABT’s split-up: After listening to today’s CC, I think the split-up is even dumber than I thought before listening. There will be some ABT drugs where the proprietary pharma successor company will market the drug in the US, Europe, and Japan, while the diversified products successor company will market the same drug in other parts of the world. Seems needlessly inefficient.

Moreover, the proprietary pharma successor company will derive about 50% of its profits from one drug: Humira. It will be the biggest-selling drug in the world (#msg-64677120), but it’s still only one drug, which is an inordinate amount of concentration for a company that is expected to have about $20B in annual sales.

PFE considered—and rejected—exactly this sort of breakup (#msg-64979236), despite intense pressure from investment bankers to do it.