During the past decade large pharmaceutical companies have pursued an aggressive strategy of mergers and acquisition in an effort to grow their businesses. But an analysis from Burrill & Company suggests the approach has been a failure as these companies have seen the loss of $1 trillion in value during the past decade.
We lost a trillion bucks in a decade? Those of us who enjoy math will stop and reflect on that number. For example, a million seconds lasts about 11 days. A billion seconds lasts about 31.5 years. To be exact, a trillion lasts 31688 years, 269 days, 1 hour, 46 minutes, 40 seconds.
In order to have lost a trillion dollars in ten years we would have to lose $100 billion each year or about $274 million a day.
What does it mean to lose that much money? In that decade I received some of that money in the form of an income. I also spent that money buying reagents and equipment. We paid Retrogen to sequence our DNA and Alphalyse for protein sequencing. While that money was being "lost", others were finding it. Some companies, like Retrogen and Alphalyse, were smart businessmen and women and they positioned themselves to be in line for some of the biopharma largesse.
My car has aged and is now worth less. The value was in fact lost. During the course of the devaluation I enjoyed the usage of my car. It had value and still does, just not as much. Likewise, BioPharma has aged and decreased in value. Unlike my highly reliable Honda Accord however, this baby was a lemon. One of the experts you would trust to make sure you don't pick a lemon is Cargo Cult leader biotech visionary G. Steven Burrill. As the industry was busy losing a trillion dollars G. Steven Burrill was succeeding.
During the course of the trillion dollar loss G. Steven Burrill must have given a warning. Leaders know that losing a trillion dollars is not the goal of any investment. We couldn't actually find any warnings that a trillion dollars was going to be lost. Did G. Steven Burrill succeed in spite of the loss or as a result of the loss? Was the industry loss his gain? How do the Cargo Cults select their leaders when the planes never land?
Prior to the loss of a trillion dollars there were warnings.
Biotech losses 94 to 04
biotech losses 90 to 93
Then came the new millennium.
biotech job losses 00 to 11
To G. Steven Burrill I offer up a different kind of award. The first ever Lifetime Achievement Cargo Cult Leader Award.
A leader is a dealer in hope.
The first ever Annual Cargo Cult Scientist Awards are coming! Silvia... you're getting one. The rest of you will have to wait and see.