Eastwoods Consulting
Notes from the East Woods
musings on opportunities in the life science marketplace

June   2009    
  
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Greetings!

Flying an ultralight aircraft may not be the best approach to running a business   Please have a read and feel free to let me know what you think.  Thanks.

Regards,

Paul Danis
Founder and Principal

ps. if you missed some of our earlier Notes, you can see them here.
 
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This Month's Features
- Flying an Ultralight Company
- Life Science Market Update
- About Us
Flying an Ultralight Company
Ultralight
I was enjoying a little peace and quite in the East Woods last weekend when the stillness was dashed by the sound of a chainsaw above my head.  I looked up and saw what looked like an outsized kite with a motor and a person.  This so-called ultralight aircraft was a funny looking, albeit functional vehicle, and it reminded me of how some companies are running their businesses these days.
 
They operate with only the bare essentials to keep the company functional, eliminating "non-essential" activities.  They have few long-term investments in new products, no employee development activities, and just enough gas to keep it out of the trees.  While a great survival tactic, it has big-time downsides that need to be considered.
  • Running light can lead to improved mobility and agility since the organization is smaller.  However, it may be very hard to capitalize on new opportunities with the reduced resources available.
  • Like in a smaller aircraft, the ride is pretty bumpy as small changes in the environment (marketplace) can buffet the company around.  A new competitor here or there, loss of a couple key customers, and instability can set in.
  • The risks of ultralights are obvious since you don't need a pilot's license to fly, and the accident rate is higher than conventional aircraft.  Similarly running the company on the edge of stability will cause some to fall into a tailspin.
  • Contrary to what you are led to believe, not everyone is flying by the seat of their pants.  If you consider pharma and biotech, they are spending around $65B this year on R&D.  If you add in the government funding, well over $100B this year will be spent on discovering new biology, developing new therapeutics and diagnostics, and furthering our understanding of disease.  Also in Q1 of this year, $1.4B was invested in over 80 early stage life science companies.
So while the view is quite exciting as you skim over the treetops with your ultralight company, take heed of the risks and missed opportunities.  There are still a number of your comrades that are flying at a safe altitude and will surely capitalize on the opportunities just over the horizon.
Life Science Market Update

Index

May Value

Change YTD

Yearly High

Yearly Low

EC BioTools

515

16%

515

411

EC BigPharma

700

-6%

709

617

EC Biotech

455

-7%

487

431

All life science indices followed the general market trends and were up over last month with Pharma posting the largest gains, up 8% from April's value.  The tools sector was quite mixed with Sigma and Thermo up nearly 10 % over April, whil Dionex was down 11%.  All members of the pharma index were up, while in biotech, advances lead declines 4 to 1.


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Many of the life science indices currently available are a mixture of various types of companies. In order to better assess the situation in the different segments, Eastwoods Consulting has created these price-weighted indices for the sectors of large pharmaceutical companies, biotech companies, and life science research tools companies.
  • EC BioTools Index - A, ACCL, AFFX, BEC, BIO, BRKR, CALP, DNEX, HBIO, HLCS, ILMN, LIFE, LMNX, PKI, QGEN, SIAL, TMO, VARI, WAT
  • EC BigPharma Index - JNJ, PFE, GSK, NVS, SNY, MRK, ABT, LLY, AZN, WYE, BMY, NVO, BAX, TEVA, SGP, ROG.VX
  • EB Biotech Index - AMGN, GENZ, BIIB, CEPH, GILD, BMRN, AMLN, IDXX, SEPR, OSIP, PDLI, CPHD, ALKS, REGN, MEDX, THRX, HGSI, SGMO, NKTR
  • Prices are taken at the close of each month.
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About Eastwoods Consulting
Eastwoods Consulting


Eastwoods Consulting helps companies connect their technologies and products with the life science marketplace.  By focusing on the most valuable opportunities, efficiency is increased, and profits grow.
 


Copyright © 2009, Eastwoods Consulting. This publication may be freely redistributed in full or in part as long as full attribution including our contact information and web address, are included.  Eastwoods is a registered servicemark of Eastwoods Consultng.