Inside Wall Street: Biotechs vs. Big Pharma in a Swedish Showdown
The showdown came at the Swedish American Life Science Summit (SALSS) conference in Stockholm, where every summer, global life-science experts and biotech scientists gather to focus on what's hot and what's not in the field of life sciences. Also represented in the yearly meetings are the global pharmaceutical companies. At this year's meeting, representatives of Pfizer (PFE), Abbott Laboratories (ABT), and Bristol-Myers Squibb (BMY) participated.
In his opening remarks, Nobel laureate Dr. Gerald Edelman, director of the Neurosciences Institute and chairman of the Neurobiology Department at Scripps Research Institute, said "unraveling the complexity of biological systems is a central challenge for researchers in the 21st century." And the conference, he said, is a response to that challenge.
Edelman received the Nobel Prize in psychology in 1972 for his work on antibodies. The SALSS, noted Dr. Mikael Dosten, president of Pfizer's Worldwide Research & Development in Sweden, serves as an excellent meeting place for life-science leaders and experts in Scandinavia, the U.S. and "other global biomedical clusters" to discuss the global opportunities that the field of life sciences provides.
Big Pharma: Out of Touch?
And then the spirited sparring between the lilliputian biotechs and the pharmaceutical giants began. Speakers representing the biotechs zeroed in on one of their major criticisms against Big Pharma: The large drugmakers, they argued, are out of touch because they focus mainly on producing blockbuster drugs, which represent impersonal, almost a macro-cure-for-all type of therapy. The biotechs, on the other hand, concentrate on specific drugs for specific types of patients, which they referred to as "personalized" medicine, or treatments that target patients' specific unmet medical needs.
One of the oft-repeated claims against Big Pharma is its sluggish attitude toward pursuing research for new therapies, which has caused them to lag behind the fast-rising needs of the sick. The large drugmakers, among other things, need to take advantage of converging technologies, said Dr. Daniel Kraft, founder of IntelliMedicine Systems, and should collaborate more and necessarily integrate with the biotechs. These pharma giants need to "wake up," he said.
Blockbusters Are Where the Value Is
Big Pharma took no time to respond. Nikolaj Sorensen, managing director of Pfizer's Worldwide Pharmaceutical Operations in Sweden, asserted that "Blockbuster drugs aren't dead, as some suggested in this conference." In fact, "we are very much patient-focused," he said, adding "our blockbuster drugs, such as Lipitor, have helped millions."
Big Pharma companies do spend a lot on research and development, and he conceded that the cost of developing and producing blockbuster drugs is high. "But we have no choice but to seek and produce blockbuster drugs because that's where the value is -- for us and our shareholders," asserted Sorensen. Since Prizer is a public company, "we report to our shareholders. We have to improve earnings by seeking and producing innovative medicines," he added.
The challenge is to focus on producing the right drugs for the right ailments, and at the same time produce value and investment returns for our shareholders, Sorensen insisted.
In an apparent reference to the biotechs' claim of doing all the hard work in the search for new drugs, Sorensen told the conference that "clinical efforts don't equal success," implying that all the biotechs' good intentions don't necessarily produce positive results. "We just don't want to be eaten up by the diagnostic companies -- as we are mainly focused on producing the right and best medicines."
Big Pharma Keeps Buying Biotechs
Apparently eager to have the last word on the seemingly endless biotech vs. Big Pharma debate, Dr. Murali Gopalakrishnan, head of Abbott Scandinavia's Global External Research, told the Stockholm conferees that Big Pharma, in fact, continues to widen its "collaborative network with the biotech industry," and is increasingly adopting new technologies in the manufacture of modern drugs.
In truth, more and more large drugmakers are turning to the biotech industry for help in diversifying and enhancing their product pipelines. In fact, the number of biotechs being acquired by Big Pharma companies continues to rise. The most recent was Pfizer's purchase of King Pharmaceuticals (KG), a biotech that has become a small drugmaker specializing in painkillers.
In sum, the wide-ranging, if acrimonious, discussions were precisely what the doctor ordered for the SALSS organizers, led by Chairwoman Barbro C. Ehmbom, who said: "In fact, it's what we strive for – the converegnce of ideas, imagination, information and communications -- which drives much of the research and exploration in the life sciences."