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Message: 4-8b guess


GAC you stopped just couple of paragraphs to quick. In the final paragraph of the article they say;


As crass as it may sound, the companies responsible for discovering and developing the next medical breakthroughs have to do so in a way that generates significant profits. If they don’t do that, investors will turn to other places to invest their money, and the companies will shrivel up and either be sold to another company or die. So the answer to the Sorkin/George question is “both”. A pharma company’s business is making drugs – and, in doing so it had better make profits.


RVX was my second biotech investment ever as I liked the science. Little did I know that science takes an amazing amount of time and money to develop. Right around the time of my investment (2008) many of the big pharma companies were developing their versions of CETP's, all of which failed to become marketable drugs. In the process those companies spent $10's of billions for nothing and there seemed to be a change in the way drugs got developed in general as a result of the enormous loss on their R&D efforts. Many of the BP's at that time cut their R&D budgets and downsized those departments. Instead of developing drugs inhouse the focus seemed to turn to letting a number of smaller ventures like RVX take the risk of developing new drugs and if and when those drugs were brought to a point of being foreseeable commercial entities these larger Pharma’s would pay larger dollars for what they believed would be winners.


So, the last sentence of the article pretty much says it all "A pharma company’s business is making drugs – and, in doing so it had better make profits." 

I just realized that article was written in July 2014 as that R&D transformation was taking place.


If you look at the development of apabetalone it's now been about 20years since Dr Wong came up with the concept and they have spent around $600 million + or - to bring it to this point. Many BP's would have changed CEO's or CSO's over that period of time and their replacements may not have had the same priorities as the ones that may have set that particular science development in motion to begin with. In short it is much more efficient for BP to let all these smaller ventures take the risk of developing new compounds and then acquire them for what may seem too many to be outrageous prices. In fact, those seemingly outrageous prices are a bargain because they generally only take on the ones that have a reasonably clear path to market.


Apabetalone today with its multimodal effects is far more understood than it was 5, 10 or 20 years ago. For those who are looking they can see potential synergies with other products already on their companies shelf, not to mention the potential megablockbust market in a space that they may want a stronger foothold in. With everything that is known about apabetalone today it looks like there is a reasonably good chance that it could become a salable drug in 2 to 4 years in a number of areas where there is unmet need. Renal, cognitive and diabetes were brought to centre stage with BETonMACE, PAH and HIV may be the next big pushes after there is a clear view to the drugstore shelf. Remember a pharma companies job is to make and sell drugs at a profit. That being said, whatever the fastest path to market will be the path taken. Everything else will be developed in tandem or later.


2 to 4 years and a billion or so dollars is not to much or to long a time to start putting profits in the pocket of the eventual buyer of this company. There is an end in site in the not to distant future. Those are big markets for this product and the synergy with SGLT2's looks amazing. If a Pharma’s job is to generate significant profits in an efficient manor, purchasing apabetalone or RVX at this time looks to be a fruit just ready to be plucked from the vine.


As far as BP buying RVX-208 or the entire IP portfolio, IMO the whole kit and kabootle will go in one package. The whole management team looks to be over 60 and the science is now 20 years old. 5 to 10 years would be swift to bring another candidate to market, do you think they have the drive at this point in their lives to do one or two more before enjoying the fruits of the labours?


Let’s see how the next few weeks and months go.


All IMO, dyodd




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