Death spiral in Pharma?

By MaverickNY on July 22, 2009

While sipping an espresso, I reading Seth Godin's blog this morning and in it he was talking about the death spiral:

"You've probably seen it. The fish monger sees a decline in business, so they have less money to spend on upkeep and inventory, so they keep the fish a bit longer and don't clean up as often, so of course, business declines and then they have even less money… Eventually, you have an empty, smelly fish store that's out of business.

The doctor has fewer patients so he doesn't invest as much in training or staff and so some other patients choose to leave which means that there are even fewer patients…"

This is never a good trend to see but it happens. Some Pharma and Biotech companies are going through it too, with diminishing pipelines, reduced budgets, layoffs and a generate climate of back stabbing and fear. It ceases to become a nice place to work anymore for many.

Not all of them are going that route though. Some are innovating their way out of the depression and focusing on how to speed up their pipelines and bring new drugs to market.

However, you don't always have to do more for less, sometimes thinking and acting smarter is a good approach.

Which Pharma companies do you see as well positioned and which ones are heading for the death spiral?

One Response to “Death spiral in Pharma?”

Chris O'Rourke July 22, 2009

Current favorites: Alexion, Eisai, and AMAG (let’s hope they don’t sell!)
Wrong direction (trying not to give you the obvious here): The Medicines Co, Genzyme (lots of internal grumblings), and most of big pharma! I wouldn’t be surprised by JnJ releasing 30% for the third year in a row come this winter!

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