My colleagues and I in the business of making medicines find ourselves wondering why businesses built around creating new therapies are often viewed with such contempt, while gadget makers are revered. The big tech wins, though almost vanishingly rare (and necessarily absent from most funds) are so spectacular that they overwhelm logic, skewing investment dollars in a fashion that contributes to the struggles of early-stage life-science companies, and arguably supports an ever-increasing number of derivative tech startups and equally derivative venture investors.
As life science VC Bruce Booth elegantly summarized this week, investors appear to overestimate tech returns (and underestimate life-science returns), despite compelling evidence to the contrary. The answers, he suggests, are that tech companies are usually easier to understand, often have more telegenic CEOs, are covered by many more media sites, and are of greater interest to readers who scour web content and account for the majority of page-views.įor healthcare folks, especially those in biopharma like me, interest in understanding tech buzz goes beyond mere device envy. Why, Primack asks, are “media folk so obsessed with the acquisition of a low-revenue blogging platform and so dismissive of an $11 billion combined revenue drug-maker?” Guess which takeout generated the most online stories (by a factor of nearly ten)? Over at Fortune, Dan Primack raised similar questions in light of the disparity in coverage this week between the reporting of Actavis’s $8.8B acquisition of Warner Chilcott, and Yahoo’s purchase of Tumblr for $1.1B. Even so, there’s still a conspicuous differential between the way we think about (at least some) tech companies, and how we view everyone else. It could well be that Cook’s tax reform suggestions are good ones, and that all CEOs, including pharma leaders, deserve intense Congressional grilling. Safe to say, a pharma executive facing this committee would have had a very different experience.
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