Notes from the East
Woods
musings on opportunities in the life science
marketplace
October 2009
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Greetings!
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This month, lots of acorns make us examine our own strategies. 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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"Mast Year" Strategies
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I was driving down the road yesterday when my car was pelted
with a hail of acorns. My first instinct
was to look for the school kids running off, but no one was to be seen. Truth is, this is a "mast year" when the
trees put out a super-abundance of seeds, hoping to maximize their chance of
progeny. They change their strategy from
a careful deliberate effort of dropping a few dozen acorns to absolutely
flooding the forest. Whether this is due
to the climate, weather, stress, or the heavens is up for debate, but this
change of strategy is very effective.
In today's volatile business climate, it is a good idea to
take a look at your current strategy, be it at the corporate, business or
product level, and make some changes.
Most life science companies operate with differentiation and focus as
the roots of their strategies. Similarly
most of the companies we work with are urgently seeking differentiated targets for
maximum returns. Low cost products and
shotgun-marketing approaches are very rare indeed in the highly technical products
of life science research.
However, times are changing, and it is apparent that low
price and efficient distribution are far more important to customers than they
used to be. With increased restrictions
on spending, customers will accept compromises in features to get a product at
a lower price. So if you haven't examined
your strategy lately, now is a good time to look at it.
Here are some of the indicators that your current approaches
to building the company, creating products, and getting them to the desired customers
are in need of a tune up.
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Your relationships with market influencers and channel
partners are not what they used to be.
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Your sales force grumbles about high prices and inconsistent
sales messages.
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You feel like you are spending more time reacting and not
enough being proactive.
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Partners and allies are more difficult to obtain.
Granted some of this is the result of market conditions, but
since you can't change the market alone, you need to look at yourself and think
about how to better adapt. Some
companies have made adjustments, as a recent tour of trade journals shows many
more offerings stating things like "Value," "Better Prices," Compelling
Prices," "Affordably Priced," "Economical Alternative." Though we're not saying let's race to the
bottom, it is a concept that needs to be considered as you revisit your current
strategy.
The oak trees have done well with parsing out a few dozen acorns
a year, and it is clear that the change in strategy provides them big
benefits. So go ahead and examine your
current assumptions - see if you can find your "mast year" strategy that will
bring great rewards.
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Life Science Market Update
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Index
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September Value
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Change YTD
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Yearly High
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Yearly Low
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EC BioTools
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639
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44%
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639
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411
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EC BigPharma
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795
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7%
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795
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617
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EC Biotech
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551
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7%
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551
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458
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The Tools sector continues its climb, up 6% since last month with all companies advancing except for Thermo and Varian. The BigPharma and Biotech indices were each up 2% with advances leading declines 4 to 1. Medarex is also no longer part of the Biotech index after its acquisition by Bristol Myers Squibb. It is replaced by Vertex.
EC BioIndex September 2009
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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.
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EC BioTools Index - A, ACCL, AFFX, BEC, BIO, BRKR,
CALP, DNEX, HBIO, HLCS, ILMN, LIFE, LMNX, PKI, QGEN, SIAL,
TMO, VARI, WAT
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EC BigPharma Index - JNJ, PFE, GSK, NVS, SNY, MRK, ABT,
LLY, AZN, WYE, BMY, NVO, BAX, TEVA, SGP, ROG.VX
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EB Biotech Index - AMGN, GENZ, BIIB, CEPH, GILD,
BMRN, AMLN, IDXX, SEPR, OSIP, PDLI, CPHD, ALKS, REGN, VRTX, THRX, HGSI, SGMO, NKTR
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Prices are
taken at the close of each month. YTD is the year to date change taken from the end of December, 2008.
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| About Eastwoods Consulting
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Translating Innovations into Profits for the Life Science IndustrytmEastwoods Consulting helps life science companies grow their businesses. Please visit our web site or contact us to learn more about how we help companies succeed in competitive markets.
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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.
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