|Acquisitions and the Pharma industry|
The Pharmaceutical industry has always been ruled by a selected number of ‘kings’, but now things are changing. New entrants are severely shaking their R & D models. Survival strategy - Instead of competing with them in research & development, the top 20 pharmaceutical companies are outsourcing the legwork to the new-borns. Not only to save around $7.5 billion annually (pharmaceutical industry) on an average, but also to save on the opportunity cost of generics replicating their formulas and selling products at huge discounts.
CytoDyn (CYDY) incorporated in 2003, has also come to the table with a revolutionary breakthrough: Cytolin. They claim it to be the only solution for HIV/AIDS (immune system therapy); and to prove it, studies of the drug will be designed and conducted by Massachusetts General Hospital. Past results of drug test on ten HIV infected subjects (carried out by company itself) were clearly evident of its efficacy and performance. But, once it gets through the study of Massachusetts General, more hype is expected, making it one of the hottest — yet one of the most classified — stocks in the biotech market.
What are your opinions regarding investment in such emerging
pharmaceutical companies? Comments, ideas or stock pick suggestions are welcome.