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November 8, 2013
Exiting Two Therapeutic Areas
So Bristol-Myers Squibb did indeed re-org itself yesterday, with the loss of about 75 jobs (and the shifting around of 300 more, which will probably result in some job losses as well, since not everyone is going to be able to do that). And they announced that they're getting out of two therapeutic areas, diabetes and neuroscience.
Those would be for very different reasons. Neuro is famously difficult and specialized. There are huge opportunities there, but they're opportunities because no one's been able to do much with them, for a lot of good reasons. Some of the biggest tar pits of drug discovery are to be found there (Alzheimer's, chronic pain), and even the diseases for which we have some treatments are near-total black boxes, mechanistically (schizophrenia, epilepsy and seizures). The animal models are mysterious and often misleading, and the clinical trials for the biggest diseases in this area are well-known to be expensive and tricky to run. You've got your work cut out for you over here.
Meanwhile, the field of diabetes and metabolic disorders is better served. For type I diabetes, the main thing you can do, short of finding ever more precise ways of dosing insulin, is to figure out how to restore islet function and cure it, and that's where all the effort seems to be going. For type II diabetes, which is unfortunately a large market and getting larger all the time, there are a number of therapeutic options. And while there's probably room for still more, the field is getting undeniably a bit crowded. Add that to the very stringent cardiovascular safety requirements, and you're looking at a therapeutic that's not as attractive for new drug development as it was ten or fifteen years ago.
So I can see why a company would get out of these two areas, although it's also easy to think that it's a shame for this to happen. Neuroscience is in a particularly tough spot. The combination of uncertainly and big opportunities would tend to draw a lot of risk-taking startups to the area, but the massive clinical trials needed make it nearly impossible for a small company to get serious traction. So what we've been seeing are startups that, even more than other areas, are focused on getting to the point that a larger company will step in to pay the bills. That's not an abnormal business model, but it has its hazards, chief among them the temptation to run what trials you can with a primary goal of getting shiny numbers (and shiny funding) rather than finding out whether the drug has a more solid chance of working. Semi-delusional Phase II trials are a problem throughout the industry, but more so here.
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