Goldman Sachs Asks in Biotech Research Report: 'Is Curing Patients a Sustainable Business Model?'

[annV]

https://www.cnbc.com/2018/04/11/goldman-asks-is-curing-patients-a-sustainable-business-model.html

Goldman Sachs analysts attempted to address a touchy subject for biotech companies, especially those involved in the pioneering "gene therapy" treatment: cures could be bad for business in the long run.

"Is curing patients a sustainable business model?" analysts ask in an April 10 report entitled "The Genome Revolution."

"The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow."

Richter cited Gilead Sciences' treatments for hepatitis C, which achieved cure rates of more than 90 percent. The company's U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report.

"GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients," the analyst wrote. "In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise."

The analyst didn't immediately respond to a request for comment.

The report suggested three potential solutions for biotech firms:

"Solution 1: Address large markets: Hemophilia is a $9-10bn WW market (hemophilia A, B), growing at ~6-7% annually."

"Solution 2: Address disorders with high incidence: Spinal muscular atrophy (SMA) affects the cells (neurons) in the spinal cord, impacting the ability to walk, eat, or breathe."

"Solution 3: Constant innovation and portfolio expansion: There are hundreds of inherited retinal diseases (genetics forms of blindness) … Pace of innovation will also play a role as future programs can offset the declining revenue trajectory of prior assets."

 

[SugarMagnolia]

This is not the first time I'm posting this and it probably won't be the last:

"Ain't no money in the cure. The money's in the medicine." ~ Chris Rock.

 

[SugarMagnolia]

Business idea: Open lots of loud nightclubs to give people tinnitus and then clinics to cure people of tinnitus and then send them back to the nightclubs ad infinitum.

 

[Alue]

This is why I wish there was more government funding going towards medical research. Government funded research is unique in the fact that they are less risk adverse because don't have to worry as much about making a profit in the short term. The US spends what $500 to $600 billion a year on military spending? Imagine if some of that taxpayer money went towards medical research.

 

[TheDanishGirl]

This is not the first time I'm posting this and it probably won't be the last:

"Ain't no money in the cure. The money's in the medicine." ~ Chris Rock.

Personally I do not care if the "cure" is medicine or a one-time treatment. I would gladly gobble up pills worth a $100-a-month or more, if it took my tinnitus away....or just made it very mild and unable to get worse.....that is if there were no serious side effects, but a one-time treatment could also have side effects.

 

[SugarMagnolia]

Personally I do not care if the "cure" is medicine or a one-time treatment. I would gladly gobble up pills worth a $100-a-month or more, if it took my tinnitus away....or just made it very mild and unable to get worse.....that is if there were no serious side effects, but a one-time treatment could also have side effects.

If you have to keep taking the pills, it's not a cure. And this is the point. We would all gobble up the pills if they helped even a little and the pharmaceutical company would have a customer for life. With a cure, they have a one-time only customer. So they have no incentive to develop a cure.

I would post the video of Chris Rock, but it's full of curse words. You can find it by looking up "Chris Rock - Doctors & Drugs" on YouTube.

 

[TheDanishGirl]

If you have to keep taking the pills, it's not a cure. And this is the point. We would all gobble up the pills if they helped even a little and the pharmaceutical company would have a customer for life. With a cure, they have a one-time only customer. So they have no incentive to develop a cure.

I would post the video of Chris Rock, but it's full of curse words. You can find it by looking up "Chris Rock - Doctors & Drugs" on YouTube.

I will watch the video. I like Chris Rock

And you are right, pills that you would have to keep taking, would not be a cure, but a treatment instead.

 

[SugarMagnolia]

This is why I wish there was more government funding going towards medical research. Government funded research is unique in the fact that they are less risk adverse because don't have to worry as much about making a profit in the short term. The US spends what $500 to $600 billion a year on military spending? Imagine if some of that taxpayer money went towards medical research.

This would also prevent unscrupulous pharmaceutical companies from raising their prices so high that many people can't afford their medication. In 2015, a pharmaceutical company raised the price of a life-saving drug from $13.50 per tablet to $750 per tablet.

 

[SugarMagnolia]

I like Chris Rock

Me too.

 

[Niel S.]

This would also prevent unscrupulous pharmaceutical companies from raising their prices so high that many people can't afford their medication. In 2015, a pharmaceutical company raised the price of a life-saving drug from $13.50 per tablet to $750 per tablet.

That's not true in the case you are talking about. People who can't afford Daraprim can get the drug for only one dollar per pill. So it's not that people can't afford this medication anymore because of the drug price hike. No one had to suffer.

Get your facts straight. I hate it when people just believe what the mainstream media is telling them without doing good research themselves.

 

[jay777]

 

[SugarMagnolia]

That's not true in the case you are talking about. People who can't afford Daraprim can get the drug for only one dollar per pill. So it's not that people can't afford this medication anymore because of the drug price hike. No one had to suffer.

If all the people who could afford $13.50 but can't afford $750 are getting it for $1, then the pharmaceutical company would be losing $12.50 per pill.

Get your facts straight. I hate it when people just believe what the mainstream media is telling them without doing good research themselves.

I got my info from The New York Times. I consider that good research. I'm not an investigative journalist myself, so I rely on the research conducted by respected sources such as the NYT.

 

[Halsy]

Those people are worse than Hitler. Fucking unreal. And of course the one thing they always fail to grasp in their psychopathic myopia is that sick people are a drag on the economy. A healthy, productive society is a far better thing to have than a crippled one. It's so self-evident that it's the assumption of not curing people to begin with is beyond asinine. Since my PT started it's cost the taxpayers of this province 10's of 1000's of dollars. And that cost is only going to keep increasing unless it resolves itself or they find a cure. It's not rocket surgery.

 

[PaulBe]

Goldman Sachs are the entry portal to the pits of Hell. Evil, malignant organization.

 

[Charles_T]

Goldman Sachs analysts attempted to address a touchy subject for biotech companies, especially those involved in the pioneering "gene therapy" treatment: cures could be bad for business in the long run.

"Is curing patients a sustainable business model?" analysts ask in an April 10 report entitled "The Genome Revolution."

"The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow."

This is the problem with the medical community and why I despise most doctors, big pharma, and the industry. If left to their own devices they would kill us all and sell the blood. We live in a sick world for sure.

 

[derpytia]

What ***holes. People suffering from diseases and conditions that rob them of the ability to live life and these people only care about making money over a long period of time? I bet you that if these people got T or cancer or other chronic conditions like ehlers danlos or fibromyalgia they would eat their own words and beg for a cure despite how little money they would make over time.

 

[jeff W]

Only the rich should have access to cures.

 

[Grey Dawn]

Opiates make my sound decrease, good or bad. What about others?

 

[coffee_girl]

This is just awful and depressing in so many ways, even if it is the reality of things. Money rules everything.

 

[Bill Bauer]

Money rules everything.

As it should. If it didn't, the drugs and the medical procedures that we have access to today, would have never been developed in the first place.

 

[Bill Bauer]

Only the rich should have access to cures.

You do know that during the 20th century we have already had numerous countries proclaiming that the cures should be available to all, right? And you are aware of the fact that the progress stalled in those countries and then Nobody had any cures, right?

 

[Bill Bauer]

What ***holes. People suffering from diseases and conditions that rob them of the ability to live life and these people only care about making money over a long period of time?

So what you are basically saying above is that you expect others to work to promote your interests instead of working to promote their own interests. How is this different from slavery, and who is the ***hole here?

 

[Bill Bauer]

If left to their own devices they would kill us all and sell the blood.

Who would they sell the blood to? Also, would killing all of their customers really lead to them maximizing their profit?

 

[Bill Bauer]

In 2015, a pharmaceutical company raised the price of a life-saving drug from $13.50 per tablet to $750 per tablet.

And by forcing the price back to $13.50, what do you think the government did to this firm's incentive to invest into R&D in the future?

In any case, regarding "is it good business to come up with cures" horror story - in my opinion this is the result of the company not having enough competition.

 

[coffee_girl]

As it should. If it didn't, the drugs and the medical procedures that we have access to today, would have never been developed in the first place.

Yes one can agree with the pillars of capitalism while still acknowledging its impact on society, runaway capitalism is only slightly better than the worst socialist societies. I don't believe anything should be ever be obtained for free but I feel that these kinds of business practices can only lead to worst forms of social injustice. A perfect society needs to have a good balance of free market incentives as well as social values. Too much Ayn Rand will tear at the fabric of society as much as too much Bernie Sanders can only create an invasive government. When it comes to health, the very talk of "let's not cure them, let's just create a life long dependency" is truly shocking to me.

 

[Bill Bauer]

In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise."

This analyst seems to be arguing that it is better to invest into cures for diseases like cancer, than to invest into cures for infectious diseases. Ultimately, this benefits the consumers too. See, as a consumer, you don't want the pharmaceutical companies and the firms that provide funding to them to lose money. The more money they make, the more willing they will be to invest money into more treatments (the more money they will Have to invest into those treatments). So the advice of this analyst seems to be ensuring that the number of cures and treatments produced by these firms in the Long run will be maximized.

 

[coffee_girl]

For those interested in a very good debate between a pharmaceutical company and those against it, this video is totally worth the watch. It shows both sides and they argue very passionately about the topic.

 

[Bill Bauer]

runaway capitalism is only slightly better than the worst socialist societies

What do you mean by the term "runaway capitalism"?

Too much Ayn Rand will tear at the fabric of society

Why? How?

When it comes to health, the very talk of "let's not cure them, let's just create a life long dependency" is truly shocking to me.

See post #26 in this thread.

Also, why are you not shocked by the decisions of the firms like GM and Apple. All of those firms had determined that it is not profitable for them to look for cures, and so they are not in the "cure" business. How is their decision different from the decision of Goldman-Sachs to invest their money elsewhere?

 

[derpytia]

So what you are basically saying above is that you expect others to work to promote your interests instead of working to promote their own interests. How is this different from slavery, and who is the ***hole here?

1. You're kinda breaking the terms and conditions rule number two here with that last bit.
2. I stand by what I said. It isn't wrong to wish that people showed more compassion in their line of work.
3. Goldman-Sachs has a decidedly dodgy history and I'm not the only one who despises them and their business practices.

 

[Bill Bauer]

Those people are worse than Hitler. Fucking unreal.

U.S. national debt is out of control.
http://www.usdebtclock.org/
Paying down the national debt would benefit all Americans. So why are you using your personal savings in a way that would benefit you, instead of paying down the national debt, and helping everyone? You are worse than Hitler - fucking unreal, is what it is.