Lecture 11 Flashcards
Pharma companies fund their R&D from…..
the revenues earned on products successfully introduced into the market and used by patients
what is the main role of the r&d process
add value to the idea
what is the conceot of attrition and portfolio
Multiple projects must be pursued in parallel to ensure product introductions
-because the probability is so low that the project will actually succeed
failures in which phase are the most expensive
3
> 25 project starts -> ….
1 product registration
For more than a decade Pharma have spent billions of dollars on research to find a treatment for Alzheimer’s” ….”……
an estimated 150 to 300 experimental Alzheimer’s treatments have failed to show clinical benefits..
Of 100 failed AD drug programs … …. compounds failed in phase 3
30
Traditional Pharma R&D: programs
- Multiple development programs with
different risk / reward - Programs with different failure profiles
- early (cheap) or late-stage (expensive)
failure - Programs of lower innovation
- Fast-follower / me-better projects
- Incremental innovation
which therapeutic areas have the highest success rates
cardiovascular
cns
infectuous diseases
THE TRADITIONAL MODEL: like how the company works
- Vertically Integrated Pharma Co.
- Large self-sufficient organizations:
- Use their own resources for majority of activities - “soup to nuts R&D”
- Internal specialist scientists - ideation - project initiation
- Associated with high fixed overhead / infrastructure / costs
The Evolving Pharma R&D model
- Focus on “core business”, limit fixed costs, offload routine tasks, access some
technologies from specialist service providers - Increased use of service providers, external specialist technologies
- Flexibility, short term contracts, reduced costs
Value / cost of acquisitions is dependent on …..
stage of development and product potential
how do people get money for science
-investors pay for the lil things
-investors pay using milestone driven investment
-exit and IPOs pay money
what is venture capital
-big companies that invest a lot of money in people
-VCs raise capital based on their track record of portfolio company successes
what is domain associate
-Founded in 1985
-Raised 2.8 billion $ capital
-Started ~260 companies
