Epoch 24: BIOPHARMA HISTORY & BEYOND (Part 1 of 3)

The Eras of Big Pharma & Specialization (1980-2021)

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Hello Avatar! Welcome back for another week of biotech analysis. Today we will begin our much anticipated 3 part series on the history of the biopharma industry and where the path forward leads.  Over the next few weeks we will leverage a Torreya/Stifel framework to review the evolution of the biopharma industry.  This will begin with a look back at our past, starting from the origins of the industry in the late 1800s to early 1900s into what eventually became known as the “Big Pharma Era.” We will then transition to the “Speciality Era” in which the focus shifted from blockbuster products to rare disease, oncology, and more recently pandemic products which largely are pioneered by the biotech industry.  Next week we will transition into the next phase of the industry that is just kicking off - the “Polyindication Era.” A time in which growth will be delivered via mega-blockbuster franchises for common disease which can will often be characterized as rapid franchise builds.  Finally, in two weeks we will transition to the future state of biopharma - a world where classical big pharma R&D infrastructure integrates with digital technologies to usher in a new paradigm of modern medicine - the “Algorithm Era”.

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Enough shilling for the day, lots to cover this week, let's get started!

FUTURE OF PHARMA

The next few weeks are going to shift back towards focus on industry strategy.   We recently came across an interesting framework introduced by the Torreya team (now Stifel) characterizing the different eras of the pharma industry - both past and future.  Luckily we saved a copy as the old Torreya page has been disabled.

The main purpose of us going into detail on industry history is so that we can eventually shift the discussion to focus on forward looking topics in order to prepare ourselves to be competitive in the future.  As we all know you can't understand where you are going unless you understand where you came from!  With that in mind we will run through the analysis as follows:

Epoch 24: (1980’s-2021) both the “Big Pharma Era” and “Specialization Era”

Epoch 25: (2022-2035): the “Poly-Indication Era”

Epoch 26: (2036-2050): the “Algorithm Era”

Today we will focus on the first two columns in the figure above, the “Big Pharma Era”, and the “Specialization Era.”  Before we even get to the 1980’s and the start of the “Big Pharma Era” let's go back even further to the early 1900s.