The Antidote: Inside the World of New Pharma; Barry Werth; Simon & Schuster, 2014, 435pp.
Journalist Barry Werth revisits the firm he explored in his acclaimed The Billion-Dollar Molecule (1994) to detail its travails in transitioning from startup to successful Nasdaq-listed operating company. The company is Cambridge, Massachusetts Vertex Pharmaceuticals, and the founder Harvard chemist Joshua Boger who had left Merck in 1989 to pursue a new mode of drug development.
In his recent Wall Street Journal book review, Harvard history of science professor Steven Shapin calls Vertex the “hero” of Antidote rather than any “charismatic individual.” Antidote, Shapin observes, tells about “a particular organization’s attempt to sustain innovation in rapidly changing commercial and biomedical circumstances.”
Werth provided an example in his Feb. 27, 2014 interview with investor website Fool.com: “[Vertex} had, in their first 22 years, two profitable quarters. They didn't really start turning a regular profit until they launched their hepatitis C drug. Imagine any other company, in any other industry, going 20 years without making a dime and, in fact, losing — or burning, or investing — huge amounts of capital.
“Vertex spent almost $4 billion before it turned its first regular profit, $755 million in the last year. This is just what it takes to bring out a breakthrough drug.”
How does Werth see Vertex’s future without the charismatic Joshua Boger, who left the company in 2009? “There's a much stronger strain now, within the company, of trying to satisfy Wall Street — which I think Boger predicted would undermine the company's sense of itself as a breakthrough company, and also alter its direction. What sort of effect that's having right now, I don't really know.”
As for potential Vertexes, founded by “true believers” in putting patients first, here’s what Werth told Fortune.com early in February: “Could another Vertex arise today and make it all the way to sustainability given the pressures on health care spending and the accelerating revolution in personalized medicine, where increasingly companies will be bringing out more and more highly effective, eye-wateringly high-priced drugs for smaller and smaller groups of patients? I doubt it. But then everyone but Boger and his torchbearers doubted Vertex would ever make it.”
“Big Data Strategy: s+b’s Strategy of the Year”; Ken Favaro; www.strategy-business.com/blog, Jan.8, 2014.
Booz & Company senior partner Ken Favaro sees many companies organizing big data strategies around the infrastructure of big data. And that, he says, leads to waste and confusion. Instead of asking, “What is our big data strategy?” he recommends starting off with five different questions, which he elaborates on in his blogpost:
1. Does big data change the businesses you should be in?
2. How could big data improve the way you add value to the businesses you are in?
3. Could big data change who your target customer is?
4. Does it change the value proposition to your target customer from, say, providing a product or service to promising an outcome or result that new, big data–enabled insights allow only you to deliver?
5. How can big data enhance the enterprise capabilities that differentiate you from your competition?
“The World’s 50 Most Innovative Companies 2014”; Fast Company, March 2014; pp.74ff.
Boomed as “the businesses that matter most,” this year’s Fast Company annual ranking leads off with Google at first, followed by Bloomberg Philanthropies “for doing good, methodically” and Xiaomi “for reinventing the smartphone business model in the world’s largest mobile market.”
Along with descriptions of the chosen 50 comes an insert with “The 10 Most Innovative Companies in the 10 Hottest Sectors”: consumer electronics, India, retail, productivity, energy, China, finance, The Internet of Things, Hollywood, and Big Data (led by GE).
“The 50 Smartest Companies: 2014”; MIT Technology Review, Vol. 117, No. 2, pp.27ff.
Technology Review’sannual rankings choose disrupters: “businesses shaking up markets or creating new ones.” This year’s first place goes to Illumina — “on top of the genome-sequencing business.” It’s followed by Tesla Motors and Google. These three lead the list “by virtue of the disruptiveness of their technologies and the intelligence with which they built their businesses,” writes the magazine’s editor.
“Science and Engineering Indicators: 2014;” U.S. National Science Board; www.nsf.gov/statistics/indicators
This encyclopedic biennial report presents quantitative data on the U.S. and international science and engineering enterprise. Prepared by NSF’s National Center for Science and Engineering Statistics, it covers technical education at all levels, the science and engineering workforce, domestic and international R&D performance, U.S. competitiveness, and public attitudes and understanding of science and engineering.
One highlight: Between 2001 and 2011, the share of the world’s R&D performed by Asian countries, principally China, grew from 25% to 34%. Over this same period, share of worldwide R&D performed in the U.S. decreased from 37% to 30% and Europe dropped from 26% to 22%.
China was the second-largest performer ($208 billion) in 2011, accounting for about 15% of the global total, while Japan was third at 10% ($147 billion).
“The Terminator Effect: why we kill projects; Eugene Ivanov; http://www.innovationexcellence.com/blog/; Feb.26, 2014.
When making kill/continue decisions, you’ll do better with a “kill the losers” strategy than with “pick the winners,” writes innovation consultant Eugene Ivanov. He discusses a drug development efficiency study showing that companies terminating projects early do better than those that postpone the tough decision.
“New Research Confirms Evidence of Faltering U.S. Investment in Biomedical Research;” Stephen Ezell; www.innovationfiles.org, Jan. 29, 2014.
From 2007 to 2012, average annual investment in biomedical R&D dropped 2% in the U.S. while increasing 33% in China, 12% in South Korea and 10% in Singapore. Stephen Ezell, a senior analyst with the Information Technology and Innovation Foundation (ITIF), reports these data from The New England Journal of Medicine. He then draws on an ITIF report to assert that these trends are unlikely to abate but “only to exacerbate.” He notes that the NIH 2013 budget was 22% less, in real terms, than a decade ago.
The New England Journal of Medicine report is “Asia’s Ascent—Global Trends in Biomedical R&D Expenditures,” by Justin Chakma et al, Jan. 2, 2014, available to subscribers at www.nejm.org
“Business Dynamism in the U.S. High-Technology Sector;” John Haltiwanger, Ian Hathaway, Javier Miranda; Maurice Ewing Kauffman Foundation, Feb. 2014.
The declining pace of entrepreneurship in the U.S. is a worry, University of Maryland economist John C. Haltiwanger told CIMS Innovation Management Report in his Jan/Feb 2014 interview, “Has the U.S. Lost Its Mojo?”(pp.7-14). Haltiwanger and co-authors Ian Hathaway, research director at Engine, and Javier Miranda, with the U.S. Census Bureau, explore this concern as it applies to the U.S. high-tech sector in this Kauffman-sponsored report . Their findings confirm a slowdown in high-tech entrepreneurial activity for the post-2000 period. Moreover, this slowdown “might have disproportionate effects on long-term economic growth overall.”
Additional research by Haltiwanger and Miranda with Ryan Decker and Ron S. Jarmin of the U. of Maryland and the Census Bureau is forthcoming in their paper, “The Secular Decline in Business Dynamism in the U.S.” They write that, “The decline in business dynamism is evident in a pronounced declining trend in the pace of both gross job creation and gross job destruction. An important component of these declining trends has been the decline in the firm startup rate.”
“The R.I.P. Report – Startup Death Trends;” cbinsights.com; Jan 18. 2014.
Companies typically die around 20 months after their last financing round and after having raised $1.3 million, according to data accumulated by VC research firm CBInsights. Their report, which can be ordered at cbinsights.com, finds that most startups failures were in the Internet sector; specifically, 70% of all dead tech companies in each year since 2010.
“The Strength of Weak Signals”; Martin Harrysson, Estelle Métayer and Hugo Sarrazin; McKinsey Quarterly, Feb. 2014, www.mckinsey.com
“Weak signals”—the information snippets hiding in the noise—can help you spot customer wants and industry and market disruptions before your competitors do, say these McKinsey researchers. They offer some principles for companies to follow, with examples from Nordstrom, TomTom and others.
“Nanotechnology Update: Corporations Up Their Spending as Revenues for Nano-enabled Products Increase;” Lux Research State of the Market Report, Feb. 17, 2014; order at portal.luxresearchinc.com
Global funding for emerging nanotechnology has increased by 40-to-45% per year for the last three years, according to this survey, which was funded in part by NSF’s National Nanotechnology Initiative. Revenue from nano-enabled products grew worldwide from $339 billion in 2010 to $731 billion in 2012 and to more than $1 trillion in 2013. Revenue from the United States alone was $110 billion, $236 billion and $318 billion in those same years, respectively.
“The 2013 Venture Capital Financing and Exit Report;” Jan. 2014;103pp; http://www.cbinsights.com/blog/trends/venture-capital-report-2013
This annual report from VC database CBInsights is packed with data on financing and exit trends by sector and stage, and more. Among highlights for 2013: VC funding increased 3% to $29.18 billion across 3,354 deals. Although not beating 20ll’s post-recession high, the continued surge in seed VC deals topped the 2012 record high. Mobile startups grabbed 13% of VC funding, up from 9% in 2012.