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Author: grahamsway One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 24983  
Subject: The end of biotech? Date: 4/2/2014 12:30 AM
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Maybe not the end of biotech but it appears the best of times may be over for most biotech companies.

I don't mean their share price. I have no idea where they can go, especially short-term. But the biotech business appears headed for tough times in the future. Mainly thanks to big pharma.

Up until relatively recently, biotech has had a big developmental research advantage. But that advantage window seems to be closing fast.

Big pharma looks to have matched or even bested biotech in many major disease areas. It was Hep-C that first brought this to my attention.

Gilead's Sovaldi took the lead in the next generation Hep-C cure but it appears BMY's daclatasvir isn't that far behind and MRK's MK-5172 & 8742 will probably reach market at some time.

Looking deeper, big pharma has some pretty advanced stuff out there.

BMY's nivolumab & MRK's MK-3475 for melanoma
PFE's Xalkori & MRK's viltafolide for ovarian cancer
MRK's MK-8931 for Alzheimer's
PFE's palbociclib for advanced breast cancer
PFE's monoclonal antibody Bococizumib to lower LDL cholesterol

It appears big pharma's rapidly gaining experience in the advanced research formerly done mainly by biotech's. I think AstraZeneca sums it up best when it said in its 4Q release:

"Pipeline now includes 11 new molecular entities in Phase III or registration, almost double compared with the previous year."

Big pharma's likely to continue those gains. Equal research skill, plus huge budgets and experience in marketing their drugs, is likely to make the competition very tough for biotech's in the near future.

While there will probably be further opportunities trading biotech lottery tickets and in certain special situations. Longer term biotech investors might want to keep on big pharma encroachment.
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