WHY YOU SHOULD BLAME WALL STREET FOR PHARMA'S STARTUP PROBLEM

摘要

Earlier This Year Drug giant Pfizer announced plans to slash spending on research and development by a third. Its shares closed that day up more than 5%. Two days later rival Merck went the other way, saying it would maintain existing R&D levels. Its shares fell by nearly 3%. Investors had sent Big Pharma a very clear message: Stop spending so much money to create new drugs, even if you're losing exclusivity on your older drugs through the so-called patent cliff. It's cheaper to just buy developed molecules from private startups. Unfortunately, such sentiments elevate short-term dollars while ignoring long-term sense. They're reflective ofWall Street's callous indifference toward America's health, even when that health is literal. Right now Big Pharma has plenty of startups to acquire. But that wealth of opportunity won't last much longer. Just take a look at venture capital investment in pharma, since it's the financial engine that drives new drug development. High-level data indicate plenty of venture dollars are flowing into the sector, but the vast majority is going to mature companies that VCs won't let wither on the vine. Early-stage startups are having a much tougher go of it, with 17% fewer raising venture capital during the first three quarters of 2011 than during the same period in 2010.