Those Who Fail to Learn from Obscenity are Condemned to Repeat It

As May approaches, the ‘Street’ has perked up at the news and rumor, respectively,   of two takeover aspirations: Valeant (with Pershing Square Capital) seeking to buy Allergan for $45.6 billion, Pfizer reportedly considering an offer of $101 billion for Astra Zeneca. Let us start with the smaller obscenity first. Valeant epitomizes the worst of the pharmaceutical industry, acquiring without creating anything but pseudo-efficiencies and fiscal sleight-of-hand. Back in 2010, when Valeant bought Biovail, it snuffed out Biovail’s nascent CNS R&D efforts; we noted that “Valeant dismantled Biovail’s CNS pipeline like a hyena disemboweling a meerkat.” Now, Valeant wants to do the same for and to Allergan. Admittedly, Allergan has backed away from CNS R&D, in the past couple of years their efforts have been largely restricted to enlarging the cookbook ‘1001 Uses for Botox.’ But that is better than nothing, and some of that work has been interesting and useful. Valeant will drain Allergan of any creativity that is left. Which brings us to Pfizer and Astra Zeneca. There’s nothing like a Big Pharma consolidation to unburden both participants–but particularly the junior partner–of their expertise, innovation, and vigor. AZ’s neuro iMed is an experiment worth seeing through–but it will be a casualty of any merger. In 2000, there were 32 big and midsize companies with neuroscience programming, now there are 20. While there are many factors that have undermined CNS in Big Pharma, can anyone sincerely conclude that consolidation has been good for the industry? We would argue that consolidation has done almost as much damage as did the generic cliff.

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One Response to Those Who Fail to Learn from Obscenity are Condemned to Repeat It

  1. PorkPieHat says:

    I’d love to see an analytical argument which articulates the “consolidation has done almost as much damage as did the generic cliff” point.

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