Corante

About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Emolecules
ChemSpider
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
PubChem
Not Voodoo
DailyMed
Druglib
Clinicaltrials.gov

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
Kilomentor
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
ChemBark
Realizations in Biostatistics
Chemjobber
Pharmalot
ChemSpider Blog
Pharmagossip
Med-Chemist
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
SimBioSys
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Business|Bytes|Genes|Molecules
Eye on FDA
Chemical Forums
Depth-First
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa


Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
FuturePundit
Aetiology
Gene Expression (I)
Gene Expression (II)
Sciencebase
Pharyngula
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net


Medical Blogs
DB's Medical Rants
Science-Based Medicine
GruntDoc
Respectful Insolence
Diabetes Mine


Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem


Politics / Current Events
Virginia Postrel
Instapundit
Belmont Club
Mickey Kaus


Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Biomarkers, Revisited. Unfortunately. | Main | More Insider Trading at the FDA? »

June 3, 2011

Another Two-Person Drug Company

Email This Entry

Posted by Derek

It's not just the US where these single-digit-employee drug companies are going - here's an article from Cambridge (UK) on Sareum, which has two. Unfortunately, they got that way by shedding three dozen other employees, so it's not quite the same situation as I was talking about the other day, but it's interesting that the outsource-the-whole-thing model is alive in so many places.

If this is going to work, I think this is the scale it's going to work at. With a handful of people (and only one or two projects), you can keep a close eye on things, especially if you source as much of the crucial work as possible closer to home. I worry, though, that this is yet another idea that doesn't scale well, which is why I think Pfizer is asking for trouble.

Comments (9) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. bbooooooya on June 3, 2011 9:24 AM writes...

It almost sounds like the old joke, "How do you make a small fortune investing in biotech?".

Start with a big one.

The goal of these virtual companies isn't to take a drug through, or likely even to, phase 3 clinical studies. These companies exist to pour in a few (hopefully less than 20) million dollars and end up with proof of concept that will tempt a big pharma player to buy them. This goal is often not realized, and (if economic conditions are right) the company may then be able to play the IPO lottery, though this has become a less beneficial outcome lately.

As long as there are investors willing to front these start-ups (and this is a diminishing pool), this model will continue. If played right by big pharma, this could be a boon.

As I see it, the ready access to capital in the late 90s/early 00s that enabled a bolus of biotechs to emerge really did chemistry students a disservice. It's tough to fill a 30+ year career on a 5 to 10 year cycle than may or may not recur.

Permalink to Comment

2. HelicalZz on June 3, 2011 12:45 PM writes...

This isn't a model for big pharma, it is one for selling to big pharma. Big pharma should have more of a focus on 'in-sourcing', but at a company/program, not project level. To my mind, M&A is little more than a capitalization of R&D expenses.

Zz - 1 of 8 and in charge of outsourcing CMC items (as well as other stuff).

Permalink to Comment

3. I'm a Computationalist on June 3, 2011 3:04 PM writes...

Why beat around the bush. Lots and lots and lots and lots of idiots want to buy harmless "natural" compounds that don't do jack. It happens every day.

Thats why the chemists are doomed. Apple doesn't sell the "brilliance" of medicinal chemist PHd's or a 10 year development process, it sells unimportant products to adult children.

In other words, a 1-person drug company is one too many. Just sell the bogus design software that will automatically design a random fantastic useless chemical entity that is well known to be completely harmless and rake in the profits.

What do you think Thomas Friedmans joke economy is besides rampant FRAUD?

Permalink to Comment

4. Felix on June 4, 2011 6:43 PM writes...

Hey Amgen laid off 150 more in Boulder.

www.denverpost.com/business/ci_18195746


On the Bright side, that's 150 more potential start ups by today's logic. My goodness mass unemployment will do wonders for innovation.

I don't things are quite competitive enough. I suggest a few more thousand h1-bs or foreign Post-docs from one of the Ivy league PhD farms.

Permalink to Comment

5. Richard on June 5, 2011 11:09 PM writes...


We are a three person company - that is, three who do the work and we have one lead candidate molecule that does everything but shine shoes. (You have to believe your own bullshit without a straight face or you won't last). Scale up is the issue and every false step is not just wrong, but disaster - it is also a matter of finding the right people to outsource or help push the oyster through the parking meter... the last "right person" with years of regulatory experience we offered 1% or $1 mill upon sale of the project for his help and withdrew that offer when it turned out he was too coked to keep his stories straight - There is only so much you can do this hit and miss way and it is very slow, mostly blind alleys - with always just enough tantalizing information to keep it going - and drive everyone bananas (It works!)- but no one has quit his day job - if he has one...

Permalink to Comment

6. Simon Hamer on June 6, 2011 4:11 AM writes...

I think you've missed the point ... they let go of employees because of financial pressure. It was not a choice, it was a financial imperative to survive.


Permalink to Comment

7. processchemist on June 6, 2011 6:11 AM writes...

@6

"It was not a choice, it was a financial imperative to survive."

Sure, if you define survival 2 digits profits. Some time ago I read an analyst that was saying that tragedy was near: pharma like agrochemicals, with 5% profits. Terms like "tragedy" and "survival" can be really flexible in this brave new world.


Permalink to Comment

8. johnny stettin on June 6, 2011 9:16 AM writes...

We're a 2 person company - with one admin/office management support and a part time CEO from our investors to monitor the burn. We've been fortunate to have access to some great consultants who really know their stuff, but who don't demand a share of the company (see Richard no. 5).

Our experience is that, in many situations, we take a more conservative route than I did at big Pharma. The risks are so much higher so it's imperative that everything is done right the first time.

Also, I have a policy that I don't outsource to India or China and try to keep all the work in the US, if possible. The reason for this is that is that communication (and travel) is much much easier. This is particularly important when any problems arise. With juggling a few projects a time, there's no need to make life difficult!

Permalink to Comment

9. Bill on September 20, 2011 6:24 AM writes...

Sareum seem to be doing very well in England having developed a candidate for their Chk1 compound. Presentation at ECCP last week was very impressive. It would seem they will have a licencing deal with a top drug company soon.

Aurora compound is very exciting. Watch this space.

Permalink to Comment

POST A COMMENT




Remember Me?



EMAIL THIS ENTRY TO A FRIEND

Email this entry to:

Your email address:

Message (optional):




RELATED ENTRIES
Gitcher SF5 Groups Right Here
Changing A Broken Science System
One and Done
The Latest Protein-Protein Compounds
Professor Fukuyama's Solvent Peaks
Novartis Gets Out of RNAi
Total Synthesis in Flow
Sweet Reason Lands On Its Face