Fail Fast, Fail Early

Not the most inspiring of titles, but ask any medicinal chemist what the chances of his or her lead molecule making it through clinical trials and it's about one in ten (and falling). And no matter what anyone tells you, no one knows which development projects will fail when on the journey from the lab to your bathroom cabinet. Yes, that pill you pop for hay fever or hypertension is the result of a whole lot of great science and one big dose of good fortune.

The development strategy of big pharma embraces this fact as they seek to spend the least amount of money on the ones that don't make it. Fail fast, fail early is their mantra. So why don't they run tests in parallel (assuming it's ethical and legal) and speed up the process? Unfortunately, with these odds history and a few calculations in Excel tells you its a mug's game to try to rush perfection to much. What you need is a development pipeline (which is what equity analysts sweat about as the last blockbuster goes off patent) and then you can play the numbers game and be reasonably patient.

But wait, what about small guy who just has one or two throws of the dice and mix in a doze of commercial reality that their wonder drug or medical device has a limited market potential? And what if they don't have the luxury of funding their development from previous successes? Then they have to raise funding from VCs who don't want to wait a decade to see a return and even then the market potential may not give sufficient returns to make the investment add up financially. This is the problem facing many Healthcare Technology companies and it ain't easy to beat the numbers.

Complaining about the short time horizon and greediness of VCs is about as useful as trying to rush a product through clinical trials (and by that I mean spend more money on failures faster). It just isn't that productive. So what is the answer to this connundrum? The obvious answer is to licence more things earlier and accept a smaller slice of the pie if they make it through to market - which is what most smaller biotechs do. Alternatively, you can find a friendly source of development funds that is prepared to wait for a return and see your project through from cradle to grave - it's called working for Glaxo! But is there a third way?