Pharma family trouble?

Are changing social, regulatory and industrial environments causing some companies to consider shifting their focus outside drug discovery?

Randall C Willis
Register for free to listen to this article
Listen with Speechify
0:00
5:00
Every year, it seems, there is something new to learn by attending the annual Pittsburgh Conference (Pittcon), and by this, I mean something beyond the latest instrumentation and technologies involved in various chemical and biological pursuits.

Last year around this time, I reflected on the increased presence of smaller companies that were finally able to be seen and heard over the omnipresent sequoias—the Brukers, Beckman Coulters, Agilents and PerkinElmers, to name a few—that typically dominate the show floor. In 2005, these niche players told the world that they were ready to contribute with new ideas and new vitality and maneuverability in a fluctuating market.

Interestingly, as 2005 progressed into 2006, many of these same niche players were acquired by the market leaders. Invitrogen alone picked up smaller players like Caltag, Biosource International, Quantum Dots and BioPixels and signed distribution and co-marketing deal after deal in a bid to expand and entrench its product portfolio.

As I said, however, each year brings with it a new dynamic to the industry and as the staff of Drug Discovery News pursued its full-court press at this year's Pittcon in Orlando, I noticed one sensation that rose above the rest: uncertainty. At the same time that everyone was touting their latest and greatest wares to address the woes and wishes of their industry clients, there was this almost imperceptible but nonetheless pervasive stutter-step in their presentations.

Gone were the dramatic and definitive statements of tools and applications tailored to address key sectors of the drug discovery and development industry. Instead, these were replaced with more vague comments and sidebars regarding the more general themes addressed by the new instruments and techniques. Everything was just a little cloudier, a little muddier.

While I can't speak to all of the industries served by Pittcon exhibitors, I think I can confidently speak to the pharmaceutical and biotechnology sectors, and at the risk of sounding trite, I think we are seeing evidence of family troubles.

As we have reported routinely in these pages and in our e-newsletter DDN Online, the drug industry is in a period of intense flux as it tries to deal with the repercussions of dramatically changing social, regulatory and industrial environments. Companies are faced with serious pipeline challenges, rising discovery costs, and dropping margins. The result is companies that are beginning to question the very decision to remain drug companies; these same companies are seeing new and possibly safer opportunities in allied industries such as diagnostics.

Well, much as it does with children of parents going through a career or marital crisis, the anxiety in the pharmaceutical sector has trickled down to the supply and resource sector. The discovery-supporting companies are facing increasing—and in all likelihood, self-imposed—pressure to be all things to all people; riding the drug discovery/diagnostics/translational medicine fence for fear of alienating any one "parent" industry component.

You can see a lot of these companies dance to different tunes as they try to show everyone how valuable and integral they are to each of the client players. Juggling more and more product portfolio balls in an effort to please and amuse their masters. In the process, however, they are running the risk of becoming as diluted and scattered as the companies they are trying to serve.

Unfortunately, here is where my analogy begins to break down, because I can't just load everyone into a minivan and take them to a family counselor to work out their issues. My only advice to suppliers and instrumentation companies is to stick to those product and service areas at which you excel. The bigger players really need to focus on the development of broad-based solutions to the bigger challenges of their client industries and let the niche players develop the tightly focused solutions to more specific problems.

As we've seen in the past year, the big kids can always acquire and integrate the niche kids into their broader solutions at a later date.

 

Randall C Willis

Subscribe to Newsletter
Subscribe to our eNewsletters

Stay connected with all of the latest from Drug Discovery News.

March 2024 Issue Front Cover

Latest Issue  

• Volume 20 • Issue 2 • March 2024

March 2024

March 2024 Issue