Pharma Chiefs Throw in Towel on R&D

Boy, talk about pessimism.

This article from Fierce Biotech covering comments of CEO's from several major Big Pharma's had to be a real downer if you work in R&d in ANY of these companies.  A lot of doom and gloom about how R&D groups aren't earning a good ROI and that it's an end of an era.  Look at these comments [at London pharma conference] from CEOs of the likes of GSK, Lilly, Bayer,

I am absolutely convinced that this will be the last generation of R&D spending

The industry will not go forward another 10 years spending the money that it has been spending

Investors see us as investing large sums of money and .....hitting for the fences with less hope of being able to achieve a blockbuster

There is less belief on their [investors] part that we would make the sort of returns that make this sort of risk justifiable

There is real doubt about whether the sustainability model of pharma can be maintained with our current R&D productivity

Wow! Wouldn't that fire you up to go to work in Big Pharma on Monday morning? Might want to get that resume polished up.  Sounds like we will continue to have R&D restructuring and cost cutting.  What's not clear to me is what model will be our replacement.  It is clear to me that pharma needs innovative products coming from somewhere and it will not be able to save its way to prosperity. 

Comments like these though lead me to believe that Big Pharma will become a bunch of bankers backing outside product development and will also do a little sales/marketing on the side.  I have think company's like Roche -- that still are speaking about a commitment to R&D -- will prevail in this environment of R&D cutting.

Investors might like slashing R&D in this quarter and the next.  Let's see how thrilled they ar ein a couple more years if no products are coming to market in companies who take out the big knife on R&D. I guess you can fight for a new model and better productivity or you can throw in the towel.

 

Posted by Bruce Lehr Feb 11th 2011.

 

 

Comments

[bigredbruce]

Seeking Alpha writes about how Merck is good investment now with down numbers at moment but better upside in part due to its commitment to R&D in this environment.
http://seekingalpha.com/article/252346-merck-time-to-buy-a-rewarding-long-term-investment