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Wednesday, December 20, 2006

The Great Mall of China

Mall of America in Minnasota is huge. The Great Mall of China is three times as large. The Chinese built it prior to securing retailors however. Imagine walking through an American mall where every business had packed up and left. Empty! Now stretch each hall by a factor of ten. That is what this mall looks like. It's empty and it is HUGE! You might say that someone made a HUGE mistake.

This is a good metaphor for biotech. I've mentioned 1616 Eastlake in Seattle. This building is also a large empty space. They built laboratories with no scientists vying for them. No one, so far, has came along to rent them out. Then I've talked about Jeb Bush shelling out hundreds of millions to attract biotech to Florida. The people of Boca Raton authorized 20 million and ended up attracting biotechs golden boys who showed up in Brooks Brothers suits asking for more money. I've mentioned that by 2001 biotech had squandered 40 of the 100 billion invested. And that includes huge profits from Amgen and Genentech.

Biotech is that huge mall in China. Todays top stories from Biospace:

Altus Pharmaceuticals Inc. (ALTU) Enters Into Exclusive Strategic Collaboration With Genentech, Inc. (DNA) To Develop And Commercialize Products For Growth Hormone Deficient Patients; Altus To Receive $30M Upfront Payment And Equity Investment ... More

One of Genentechs first cloned proteins was human growth hormone. What is new here? No product, just a promise.

KOSAN Biosciences, Inc. (KOSN) Announces License Of Motilin Agonist Program To Pfizer Inc. (PFE); Kosan Will Receive Upfront Payment $12.5M; Additional Milestone Payments Up To $250M ... More

No product, just a promise.

Genta Incorporated (GNTA) Cuts More Than A Third Of Its Workforce ... More

No product, no promise.

Northfield Laboratories (NFLD) Blood Substitute Misses Trial Goal ... More

No product, no promise.

Panacos Pharmaceuticals Inc. (PANC) Bevirimat Study Falls Short ... More

No product, no promise.

Janssen, L.P.'s INVEGA(TM) Approved By FDA As New Treatment For Schizophrenia ... More

Eureka! A product. Let's hope it doesn't cause weight gain and diabetes like Zyprexa.

Orexigen Therapeutics, Inc. Files Registration Statement For Proposed Initial Public Offering ... More

No product, just a promise. 90% of all start-ups fail so the promise is weak. Plus their lead candidate is a fat pill. To not come across as a homeopathic type of drug company they throw in the promise of treating CNS disorders. Their research is driven by the obesity market. Some weak science connects their fat pill science with other conditions that can't be better treated with diet and exercise.

Gilead Sciences (Foster City, CA) (GILD) Drug Meets Goal; Company Announces Preliminary Results From Phase III Study of Aztreonam Lysine for Inhalation in Patients With Cystic Fibrosis ... More

No product, but they are getting closer to a product. This is a real product that will help people. Antibiotics work!

You see, I'm not so negative. I ended on a positive note. There is a part of the mall in China that is bustling with people. There is also a part of biotech that has produced useful drugs that help people. My criticisms of the industry come from those who use the good name acquired by honest men and women and use it to line their pockets. People like Jeff Kindler at Pfizer who was an executive at McDonalds prior to his current gig. The era began with scientists but soon became the domain of businessmen. Scientists who couldn't compete in academia hung up their lab coats and started companies. But they didn't have a product, service or a way of obtaining either. To this day they continue to start very expensive companies and/or clinical trials that have no chance of suceeding. They don't know what is needed to succeed. You start with basic science. When it becomes something, you raise the money to advance the drug.


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