The Brutal, Beautiful Maths of Blockbusters
Understanding pharma investing means getting your head around its rather unique economics. Developing a new drug is like drilling for oil in the dark. It’s incredibly expensive, takes a decade or more, and the vast majority of attempts end in costly failure. It’s a brutal game of attrition. But when you strike gold, the gusher can flow for years, protected by a wall of patents. A single successful drug can pay for a hundred failures and then some. This high-risk, high-reward profile isn’t for the faint of heart, of course. It requires a stomach for volatility and an eye for companies that have a knack for backing the right scientific horses. The key, I believe, is spotting firms with not just one promising candidate, but a diversified pipeline of potential winners.