An Update on Masochism

Since NIR’s post on ‘Those who fail to learn from obscenity are condemned to repeat it’, there has been some movement regarding both the overtures made by Valeant to Allergan, and Pfizer to AstraZeneca.

1) Allergan appears to be casting about for some alternative to being acquired by Valeant. If remaining independent is not achievable, that’s a worthy agenda, since Valeant and R&D investment are about as well acquainted as Vladimir Putin and the concept of ‘mea culpa’.

First, they reportedly looked into buying Shire, a company that has been similarly hyperfocused on the development of a single asset. A combined corporate entity (Shallergan? Allershire?) might not be any more diversified, it might be steadfastly devoted to explicating all pharmacological, household, and/or industrial uses for Botox and Vyvanse. Since that did not apparently elicit a robustly enthusiastic response, Allergan then invited Johnson & Johnson or Sanofi to consider acquiring them. Either of these scenarios would be the best of the lackluster lot, since both JNJ and Sanofi continue to put a fair amount of resources into R&D, with JNJ continuing to accentuate CNS programs.

2) Pfizer continues to press Astra Zeneca to succumb to its advances. As we said before, consolidation on this scale is the enemy of pharmacological progress. One blog reader did inquire as to whether anyone had done an objective analysis of the relative damage done by consolidation and that wrought by the generic cliff. It’s an interesting question, and if we had unlimited time, we might consider going through all the what-if scenarios that could be envisioned. Since it is unlikely that the time will offer itself, we will have to defer. Suffice it to say for the moment, that almost twenty years into publishing NeuroPerspective, we have yet to hear someone within the neuropharm industry (as opposed to the executive managers arranging such assignations) subsequently make the case that such a merger had done anything positive to the potential for advancing research.

In this particular case, Pfizer, a company that has historically been almost wholely reliant upon internal research for its pipeline, is now looking to diversify, so that eventually, 25-30% might be externally sourced. AstraZeneca, whose CNS R&D was essentially spun out into a virtual subsidiary, has a nascent pipeline, but it is one that is likely to be largely if not entirely jettisoned if Pfizer acquires AZ. That is because while Pfizer is trying to adapt its corporate culture to the inclusion of external projects,  it would be better, indeed necessary,  for Pfizer’s neuro R&D group to participate in the selection of external projects for licensing. That way, they might have some sense of ownership. Otherwise, the ‘alien cells’ are likely to be killed off by Pfizer’s R&D immune system–the likely fate of AZ’s neuro iMed component.

Given that Pfizer is largely motivated by a wish to move to the UK in order to benefit from a lower corporate tax rate, this is not a deal that is in the least bit driven by a R&D imperative. Science and research productivity have nothing to do with it, and the likelihood that both will suffer is far from the minds of those trying to close this deal. In the long run, it is this failure to build programs that is the greatest risk to the industry, and this kind of decision-making verges on corporate masochism in the guise of pragmatism.


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