Reflections on the “Build to Buy,” Part 2
Summary
The fundamental issue that underlies those challenges is that the acquirers in these deals are not in the business of developing a single asset in a disciplined, focused manner.For this success to happen, we need to focus on the idea of therapeutics as ‘solutions’ rather than simply ‘drugs’ and my prior post touched on this nuanced difference between the two.If you are replacing a generic competitor at $1 and you are selling on the awesomeness of your pharmacology or your dosing or some other direct feature of your drug, then you are effectively finished before you start because that’s a losing proposition for customers.Instead, there is an increasingly centralized and consolidated healthcare environment where solutions compete for very limited resources, and regulatory approval is not enough to ensure market access, utilization, uptake, and growth.In a case like this, the build-to-buy deal does in fact go a long way towards solving two massively important problems: the R&D challenges of modern biopharma (covered here, here, here, and here) and the financing/investor risks associated with funding early-stage, novel drug development.