Quote:
Originally Posted by HansTWN
I think lately most of the new drugs big pharma introduced came from their purchases of biotech companies. Sort of like the publishers, one big hit helps cover the losses of many losers.
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Correct. Big Pharma acquires product by licensing from smaller R&D companies or purchasing the company outright. In either case, the cost is allocated to goodwill, not R&D. And in fact, Big Pharma is moving further from R&D; a decade ago, it would acquire a promising product after good phase I results. Now, they wait for a clear efficacy signal before purchasing; often waiting until the bulk of human testing is complete. This further shifts the expenses from R&D to goodwill.