Seeking Alpha
Biotech, healthcare, tech
Profile| Send Message|
( followers)  

The folks over at the In Vivo Blog will soon be announcing their "Deal of the Year" in the biotech/pharma sector (you can scroll back over there to see the various nominees). But they could just as well run the competition in reverse, and award some retroactive Bad Deal statues based on what's been happening recently.

One of those might well go to the 2003 deal in which Pfizer (PFE) paid over a billion dollars to acquire Esperion and their Apo-A1 Milano lipoprotein. If you've been following the cardiovascular field for a few years, you'll remember the big press that this got. The Milan variant of the protein seemed to be quite effective at reverse cholesterol transport - just typing that phrase takes me back a few years, to be honest. The hope was that periodic treatments might flush the arteries out and avert atherosclerosis.

And there things seemed to stay, hung up in that "promising therapy" zone. At the time, Pfizer was going to be the biggest thing ever in cardiovascular, what with Lipitor, with their CETP inhibitor torcetrapib, and with Apo-A1 Milano coming along at the same time. That dream is a pile of wreckage now, of course - Pfizer has de-emphasized the whole area. Esperion itself was spun back out in 2008 as a much smaller operation, minus the lipoprotein it came in with, and now Apo-A1 Milano itself has been sold off to the Medicines Company (MDCO). For $10 million up front.

Yep, Pfizer gets $0.01 billion back from its $1.25 billion investment - well, more if things work out, but you'd have to think that most of that money is just gone. But I can't really say that this is just Pfizer's own problem, or just their own folly. This sort of thing can happen to any organization, and the larger it is, the more likely it is to make some sort of Big Move which then sends it falling down the stairs. After all, if you're trying to affect the future of a huge company, you have to do huge things, right? And these huge things take on a momentum of their own - witness another Pfizer disaster, Exubera. That inhaled insulin was going to be a billion-dollar drug, no question about it, and no one could tell the company any different. Well, except their customers.

But again, I don't see these things as coming from some particularly Pfizery mindset. Any other drug company of that size would probably have done things equally catastrophic, and as they get larger, the others surely will find their own open manholes to step confidently into. Since this is the first post of the new year, here's a resolution I wish the industry would consider: no big mergers in 2010. No gigantic sense-of-urgency do-this-deal-now productions, please. Let's try to do what we do better, rather than just do more of it.

Source: Pfizer's Apo-A1 Milano Flop: Typical for Big Pharma Deals