Very insightful thinking here. As someone who has worked a bit on the f/c side, I agree that the industry lacks the kind of imagination to appropriately size a non-existing market which makes it uninvestable for traditional VCs. There is also the need to build disease awareness (a horrible phrase admittedly) in clinicians and this normally percolates out over several years.
-Most big pharma companies do very little basic R&D; Novo just happens to be one of the few
-GLP-1s were discovered for their diabetic therapeutic effects. The appetite suppression was chancy especially since the mechanism is different than the insulin effects
-Although this article isn’t wrong that the market size was uncertain, I don’t think it took a genius to say “if you had a drug that made people thin you’d be very rich”
In fact, I think any investment needs to consider whether the future market of the project is in line with the interests of investors. I have also participated in some private equity investments, experienced some risks, and lost some money. I know that if I invest in such a pharmaceutical company, if the company's products do not perform well when they are commercialized, I may face the dilemma of holding a large number of stocks but being unable to cash them out. I must sell them at 50% below the market price, or even be unable to sell them
Great read and very thoughtful piece. I agree with the sentiment towards the end - especially being contrarian getting harder in the current market. More-so than ever it seems as if the go to play in every playbook is megaround with veteran management team in red hot TAs. Example - starting to feel like there are new blue chip backed China biotech obesity spin outs every 5 hours. Will be interesting to see how the market reacts when consensus areas become overcrowded (still thinking obesity) and there are no more slices of the pie. I think the lengthy bear biotech market has completely turned the investor risk button off especially as LPs are seeing losses and the pressure heats up. Hopefully macro improvements soon and ur crystal ball gets invented.
Contract sales orgs have been a feature of the biopharma ecosystem for more than a decade. OTOH large scale peptide manufacturing may have been challenging if we go back a decade or more-even using CDMOs.
Very insightful thinking here. As someone who has worked a bit on the f/c side, I agree that the industry lacks the kind of imagination to appropriately size a non-existing market which makes it uninvestable for traditional VCs. There is also the need to build disease awareness (a horrible phrase admittedly) in clinicians and this normally percolates out over several years.
Could it just be luck? Consider:
-Most big pharma companies do very little basic R&D; Novo just happens to be one of the few
-GLP-1s were discovered for their diabetic therapeutic effects. The appetite suppression was chancy especially since the mechanism is different than the insulin effects
-Although this article isn’t wrong that the market size was uncertain, I don’t think it took a genius to say “if you had a drug that made people thin you’d be very rich”
In fact, I think any investment needs to consider whether the future market of the project is in line with the interests of investors. I have also participated in some private equity investments, experienced some risks, and lost some money. I know that if I invest in such a pharmaceutical company, if the company's products do not perform well when they are commercialized, I may face the dilemma of holding a large number of stocks but being unable to cash them out. I must sell them at 50% below the market price, or even be unable to sell them
Great read and very thoughtful piece. I agree with the sentiment towards the end - especially being contrarian getting harder in the current market. More-so than ever it seems as if the go to play in every playbook is megaround with veteran management team in red hot TAs. Example - starting to feel like there are new blue chip backed China biotech obesity spin outs every 5 hours. Will be interesting to see how the market reacts when consensus areas become overcrowded (still thinking obesity) and there are no more slices of the pie. I think the lengthy bear biotech market has completely turned the investor risk button off especially as LPs are seeing losses and the pressure heats up. Hopefully macro improvements soon and ur crystal ball gets invented.
Insightful as always!
How big of a role do Contract Commercial Orgs play at the moment? Is it handling the clinical trials + marketing?
Contract sales orgs have been a feature of the biopharma ecosystem for more than a decade. OTOH large scale peptide manufacturing may have been challenging if we go back a decade or more-even using CDMOs.