>>PFE should forget about trying to replace the sales that will be lost to patent expirations because this can’t be done without incurring even greater problems.
Instead, PFE should continue to downsize and should aggressively leverage the balance sheet to the point where ROE becomes impressive. Doing this would leave a very different company, but it’s the best chance to increase shareholder value, IMO.<<
As we've discussed previously, this seems to be trend we're seeing from Big Pharma. Yes, they are buying drugs to replace ones lost due to patent expiration, but more obviously they are losing weight and hunkering down.
So where does this lead? It would seem to lead to drug companies spending less money - including less money on discovering new drugs. Alarm bells have already rung about the slowing rate of drug discovery and commercialization - particularly per dollar. Well guess what? The rate at which new drugs are discovered and commercialized may decrease further as Big Pharma downsizes.
Furthermore, small biotechs are unlikely to make up the deficit unless Big Pharma opens the pocketbook up wide to fund them.
And why have less drugs been commercialized lately? Is it only due to a cautious FDA? Or is biology a finite science and the new continents are becoming fewer and fewer ...
I'm not sure if I'm reading the trends right, but if I am I'll be adding more companies to my portfolio in areas like robotics and nanotechnology and less in drug discovery and commercialization!
micro
P.S. I fully expect some hand grenades tossed my way tomorrow, and will be disappointed if otherwise.
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