Sunday, April 18, 2010

Life Sciences Industry – What’s Going On?

Maybe I’m numb or going through withdrawal after the passage of the Patient Protection and Affordable Care Act but things seem to be awfully quiet in the life sciences industry lately. I look at other industries, financial services, automotive, and things are hopping. Even railroads have mergers and acquisitions going on.

While I can’t admit to exhaustive research in the life sciences industry, I just haven’t seen a lot of momentum behind anything lately. There are no blockbuster products, no big mergers and acquisitions, or no big research ideas. (I apologize to all those researchers slaving away but they really need to get better publicists.) Business seems to be atrophying. What’s going on?

Are we looking at an industry that’s going away? Now, I’m sure some of you are wondering what I’m rambling about this time. Am I maybe overreaching here? I don’t think so. History’s on my side. Remember the personal computer industry? That went through a similar cycle of boom and bust, if somewhat more accelerated. Once upon a time the media was full of stories about new products, companies, and ideas. Not to mention the personalities? Anyone remember Adam Osborne? (In case you’re curious, he died back in 2003 in India.) Today, the industry’s products are commodities manufactured in China. Some might even argue that with new innovations like iPads or PDA’s personal computers are going the way of the buggy whip.

When I visit Mike Huckman’s blog ( ) I don’t see any trends developing. (No criticism of Mike is intended, whose blog is one of my favorites (I wonder if he will continue as he is rumored to be leaving CNBC for a PR firm this month), he can only write about what’s out there.) There almost seems to be a defensive posture in the industry. Products are being recalled, regulators are becoming more aggressive, and healthcare reform weighs on the industry.

So what does this mean? If the personal computer industry is any example then consolidation, lower prices, and possible business failures are safe guesses. Maybe this is life science’s high water mark. Or, maybe not. One thing’s for sure, the life sciences industry is in a state of flux. Big time.

All the old rules seem to be changing now. At least as far as life sciences go. The challenge will be identifying what will be the clues to the turnaround, if there is a turnaround.

I’m going to make another one of my predictions. The life sciences industry is going to go way for a while. A long while. The industry’s business fundamentals are askew. Globalization isn’t helping. The regulators are struggling. My blog last week about Myriad Genetics (MYGN) and its legal problems is another piece of evidence. Healthcare reform is beginning in the States. A new generation of companies and managers are needed. I’ll be following this one.

As always, we welcome your feedback. Please contact us at We look forward to hearing from you.

Contributed by Guy de Lastin

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