Tuesday, April 17, 2007

The 60-million dollar gamble!

You might criticize the pharmaceutical industry at times for high prices and profiteering, but they are really the only ones that are willing to take the high risk to heavily invest in pharmaceutical research.

Publicly traded companies need to disclose their quarterly financial reports. And you can access Indevus' financial report (thx for the tip, Holger!). These reports also include cashflow forecasts on the potential costs and income over the coming years. They estimate to spend about 60 million dollar on Pagaclone:
Given these uncertainties and other risks, variables and considerations related to each compound and regulatory uncertainties in general, we estimate remaining research and development costs, excluding allocation of corporate general and administrative expenses, from December 31, 2006 through the preparation of an NDA for our major compounds currently being developed as follows: approximately $9,000,000 for NEBIDO, $14,000,000 for PRO 2000, approximately $46,000,000 for IP 751 and approximately $61,000,000 for pagoclone for stuttering.

I am convinced that rival companies are currently working backstage to decide whether to join the hunt for a stuttering drug. We should be glad about such a development, as more money goes into stuttering research.


Unknown said...

Hey Tom, you are talking like a Quant (may because you are); you have an abstract notion of risk where each unit of uncertainty must be rewarded by a certain return determined by market's trading.

Unfortunately, that's how the market behaves. Nevetheless, I still think that in certain activities, such as water distribution, energy access and health, we must ponderate by a humanitarian factor and accept a lower return. There are several ways to do it ...

Tom Weidig said...

Yes, I am a quant! :-)

Fine, but then the state needs to take over this role, i.e. everyone of us.

Why should a pharmaceutical company to do this, but everyone else invests in the stock market that has higher returns!