February 13, 2007
The reality of biotech
New York Times reviews Gary Pisano's new book, Science Business: The Promise, the Reality, and the Future of Biotech. The big claim of Science Business is that contrary to popular perceptions (or perceptions within the biotech world), biotech is actually
no more efficient at drug development than traditional big pharmaceutical companies. That conclusion runs contrary to popular belief that scrappy, driven biotechnology entrepreneurs can run rings around the bureaucratic drones of Big Pharma.
Biotechnology has been “one of the biggest money-losing industries in the history of mankind,” Arthur D. Levinson, chief executive of Genentech, told analysts in New York last year. He estimated that the biotech industry as a whole has lost nearly $100 billion since Genentech, the industry pioneer and one of its most successful companies, opened its doors in 1976. Only 54 of 342 publicly traded American biotech companies were profitable in 2006, according to Ernst & Young.
Most biotech enterprises face a host of daunting challenges. While they can work much more nimbly than their brethren in Big Pharma, they also lack some of the hard-won experience that large corporations bring to the drug pipeline. Moreover, biotech companies often aim at harder-to-conquer diseases and use more experimental technologies, further complicating their quests.