Today brings some pharma business news that makes no sense to me - see what you think. Via FierceBiotech, we have this report from Sky News in the UK. It's all about a new venture from Christopher Evans, which is said to be ready to "change the business models" of the big drug companies.
Howzat? Here, apparently is how:
Evans has lined up a heavyweight group of industry executives to join NCPharma Inc, which plans to raise billions of pounds to finance the acquisition of portfolios of medicines that are in development. They would then be sold back to the big pharmaceutical companies which founded them once they are ready to be taken to market. . .
. . .The company is initially aiming to raise $750m to finance the development of 32 clinical compounds licensed from Merck, according to insiders. As deals are done with other pharma companies, scores more products will be added to NCPharma’s development portfolio.
Conceivably that could mean that NCPharma is developing as many as 150 drug compounds within a few years if it persuades a handful of companies to partner with it.
Well, no, actually, that is not conceivable. 750 million is nowhere near enough to seriously pursue 32 compounds across several different therapeutic areas in the clinic, for one thing. And how, exactly, does Merck come to be sitting on 32 viable clinical candidates that they haven't quite gotten around to developing? A cynical mind might imagine that the company is cleaning out its desk drawers and wishing NCPharma good luck with its dusty collection of also-rans. Something does not add up here.
And how does this new company plan to succeed with the castoffs from the rest of the industry? Well you should ask:
The company believes it will be more effective than the integrated drugs companies at developing late-stage candidates because it will be “completely focused on clinical development of new pharmaceuticals and will not be affected by major overhead nor distracted by large corporate infrastructure, early research, large scale manufacture nor marketing activities. It will license-in only the best quality, premier drug portfolios from big pharma and biotech companies to develop in its unique, low-risk model.”
That is a string of grammatically correct English words, indeed it is, but it does not convey sense. Big pharma and biotech companies will not outlicense their best quality stuff - why should they? NCPharma will face the same costs and the same success rates as anyone else in the clinic - how can they not? And it's not like there aren't other companies out there that will provide outsourced clinical trial services for you; this is not some new business model that's just been thought of.
No, the only way I can make this add up is to note that there's a lot of talk about Middle East/Gulf States money in this venture. There's not much pharma expertise in that part of the world, and a cynical observer might see this whole thing as an arbitrage play. One group has a lot of money, but no drug industry. Meanwhile, the pharma industry has a lot of failed or sidetracked drug candidates, and no desire to spend more cash on them. And a third group, well, they exist to bring those two together. Am I missing anything?