pharmaceutical portfolio management Archives

21 03, 2014

Pharmaceutical Portfolio Management Primer

By Dan Smith|2017-05-23T15:42:01-08:00March 21st, 2014|Blog|0 Comments

Why is Portfolio Management So Successful in the Pharmaceutical Industry?

R&D portfolio management has been embraced by the pharmaceutical and biotech industries more than any other because of the unique characteristics of drug development: Huge investments, long development timelines, extremely high risk, and a large number of products in the pipeline. Other industries possess some of these characteristics, but it is the combination of all of them that provides both ample time and motivation to actively manage the portfolio. For example, airplane manufacturers have both long lead times and high investment requirements, but they only develop a few planes at a time, so managing the “portfolio” is primarily achieved by managing the individual projects.

(more…)

Storytelling and Pharmaceutical Portfolio Management

By Rich Sonnenblick|2017-05-23T15:42:03-08:00September 20th, 2012|Blog|0 Comments

Humans have always been and will always be storytellers. From the fireside tales of bygone millennia to today’s TV dramas and movies, the power of the narrative holds us in rapt attention as it both entertains and makes sense of the world around us.

How does this relate to pharmaceutical portfolio management? Essentially, portfolio management is about affecting change in an organization. But real, honest to goodness change is hard to bring about; what people will do to avoid change is the basis of many a sitcom. To initiate change, you need to make a compelling case against the status quo—you need to tell a great story. Your tale might unfold like this:

Act I: Set-up, or “How We Got to Where We Are”

Act II: Complication, or “We’re On the Road to Ruin (or at least mediocrity)”

Act III: Resolution, “The Happy Ending—if we do portfolio activities A, B & C”

It isn’t always safe or easy, but whether you are an analyst convincing your manager or an executive persuading the board, telling a story will help you make your case, and do so in an effective and entertaining way.
(more…)

Pharmaceutical and Biotech Portfolio Management: How Easy is it to Spend 10 or 20 Billion?

By Rich Sonnenblick|2017-05-23T15:42:04-08:00July 29th, 2012|Blog|0 Comments

What is an R&D-driven company with $10-50 billion of cash in the bank to do?

In the last twelve months, Merck, Pfizer, HP, AstraZeneca, and Bristol-Myers Squibb have announced stock buybacks totaling over $25 billion, and layoffs of over 30,000 employees. So apparently, for many firms, the best use of their cash hoard is a stock buyback, or to stand pat, secure in the notion that they can defend against a hostile take-over. This trumps increased R&D spending as well as retaining current sales staff.

Last week, venture capitalist Peter Thiel posed a related question, of sorts, to Eric Schmidt of Google during the Fortune Brainstorm Summit in Aspen, CO:

Google also has 30, 40, 50 billion in cash. It has no idea how to invest that money in technology effectively. So, it prefers getting zero percent interest from Mr. Bernanke, effectively the cash sort of gets burned away over time through inflation, because there are no ideas that Google has how to spend money.

(more…)