Lately, the small-and-nimble theory has captured the pharma imagination. Even massive drugmakers are splitting their operations into smaller chunks, in hopes of fostering the sort of innovation that drives biotech. But what if big really is better?
That's the contention of strategy-oriented execs, who, not unexpectedly, happen to work at two Big Pharmas in the process of getting even bigger: Mervyn Turner, chief strategy officer at Merck (soon to be one with Schering-Plough), and Thomas Hofstaetter, senior business development strategist at Wyeth (soon to be part of Pfizer). At the Windhover Pharmaceutical Strategic Alliances conference, the two men argued that large drugmakers have some equally large advantages.
For example, the cash to fund expensive trials--and cushion the blow when trials fail. ("You have to have size ... to buffer against those late-stage shocks," Turner said, as quoted by Reuters.) Then there's the ability to capitalize on patent protection by trying out multiple indications for the same drug at the same time. "Patent life is finite. You have to exploit it or you lose it," Hofstaetter explained.
Not to mention operations that are big enough to drive sales, and to snap up other companies' drugs via acquisition or licensing. "In order to be really successful and realize the value of your assets in a reasonable period of time," Hofstaetter said, "you need to have critical mass globally and in key markets." Convinced? Or is small still beautiful to you?
- read the Reuters piece