Pharma’s danse macabre

 

 

Last issue, I spoke about the danse macabre in which many companies participate, fluctuating between an IP land grab and sales & marketing blitz and how it has become tiresome. Apparently, I struck a nerve, as several readers provided me with strenuous responses that we appended to the commentary. But it also got me thinking, where are some of the other big players in this dance: Bayer Healthcare, for example?

 

While the headlines have been rife with news—positive and negative—about companies like Pfizer and AstraZeneca, Bayer has slowly moved its way through the business world, not really bothering anyone. To use an obtuse analogy, think of an ambling whale shark quietly observing a school of tiger sharks in a cannibalistic (and sometimes auto-cannibalistic) feeding frenzy. The whale shark may not be as sleek, but it has survived as long as any of the others.

 

This is not to say that Bayer isn't in acquisition mode; much to the contrary. In the last year, they have acquired diabetes-monitoring specialist Metrika and Schering AG, as well as a couple of product lines. Similarly, it has divested itself of a couple of product lines, including a good chunk of its diagnostics business to Siemens. But where Bayer has busied itself with many of the same basic business practices as the other companies, there doesn't seem to be the same sense of urgency or panic. Perhaps I am being unfair, but I don't think so.

 

Interestingly, where the other pharmas talk about divesting staff and facilities to curb monthly burn rates, Bayer's Chairman Arthur Higgins talks about the acquisition of Schering in much the same terms, stating: "The changes in Research and Development will leverage the combined assets of Schering and Bayer to maximize both the output and effectiveness of our global drug discovery and development programs. They also give us the flexibility to substantially lower our ongoing infrastructure costs."

 

Abbott Laboratories seems to be making its way through the corporate jungle in a similar manner, making key acquisitions—Kos Pharmaceuticals and Guidant's vascular business—to improve its market position and divesting itself of assets—laboratory diagnostics to GE Healthcare (again, diagnostics)—to strengthen its focus on therapeutics. And again, there is no sense of panic…no mad scramble for assets.

 

So what makes Bayer and Abbott so different? Is it just that I'm writing about the companies during a particularly good point in their drug pipeline cycle and that they too will stumble when some of their drugs go off patent? I don't think so.

 

To a science geek and business hack like me, there is something viscerally different about these companies. Maybe it's diversification. Maybe it's something in their genetic legacy. But they are definitely worth further study—if not by the business press, then perhaps by others in the pharma community stumbling through the danse macabre.