Viewing Risk Through a Medicines Co. Lens

The Medicines Co. (TMC) has pioneered a strategy of in-licensing otherwise unwanted-compromised--late-stage products that it can acquire for little money and then, moving quickly to approval, drive sales through Phase IV positioning trials. The financial equation works for investors who are realizing that, as Big Pharma interest in signing large-dollar discovery deals wanes, they will now have to fund both technology and product development. That dramatically changes the risk/reward ratio which made investing in discovery-based biotechs worthwhile-and makes a development strategy like TMC's more attractive. The strategy is hardly risk-free: many compromised products are compromised because they don't work; and even when they do, the developer doesn't know a priori in which indications they do work-one of the reasons the company almost failed.