Notes from the East
Woods
musings on opportunities in the life science
marketplace
August 2010
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Greetings!
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Even something as sinister as a blight can show us how to succeed. Please have a read and feel free to let me know what you think.
Regards,
Paul Danis
Founder and Principal
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Is Your Business a Blight?
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There is a blight on my land, and it just killed my favorite chestnut tree. The so-called chestnut blight, introduced a century ago, wiped out 4 billion American chestnut trees and is still a potent exterminator of all the new trees sprouting from the old roots. I had great hope that our 30 footer would have some genetic variation to ward off the fungus, but that was not to be. After putting out a few leaves this year, it is finally done, soon to become boards and firewood.
The success of this blight is quite remarkable and reminds me (in a dark sort of way) of successful businesses and products. The blight's attributes are truly something to aspire to, although hopefully in a more positive fashion.
- Very clear target - The fungus only kills the American chestnut, not the Chinese, European*, horse or any other. Your products need to be well aimed into the target market segment. The more specifically the customer can be defined, the better your chance for success
- No competition - Nothing short of forest fires and chainsaws affects the chestnut. They are served up for the blight to attack at will. Everyone would like a market like this - customers just waiting for your product with open arms. The proverbial white space.
- Very effective - Pretty much 100% of the trees succumb to this fungus. Similarly you'd like to see all your offerings leave customers completely satisfied and happy.
- Well established - After 100 years of successfully keeping chestnuts from reclaiming their position as a dominant forest tree, the blight continues unabated. This is nirvana for a company - entrenched products that are adopted by all-comers.
However, even something as successful as chestnut blight won't dominate forever. The American Chestnut Foundation has been breeding resistant varieties that may ultimately leave the blight without willing hosts.
Though this cryphonectria parasitica is indeed devastating, it does give us some lessons for success. And while you strive to achieve the success on the scale of this blight, just keep an eye on the horizon. Market leadership is not forever, though a century is a pretty good run.
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*For inquiring minds: Technically the European chestnut is susceptible to this blight. However, due to infection of the fungus by a hypoviridae virus, the fungus is less virulent and the chestnut trees survive.
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Life Science Market Update
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Index
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July Value
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Change 12mo.
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12 mo. High
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12 mo. Low
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EC BioTools
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637
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5%
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738
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604
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EC BigPharma
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713
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-2%
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801
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696
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EC Biotech
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563
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9%
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642
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484
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Biotech had a stellar month, up 8% over June's close with 6 companies up over 10%. Genzyme was up 37% on expectation of its acquisition by Sanofi Aventis. BigPharma was mixed, ending up a percent for the month. BioTools was mixed as well with the exception of Beckman who was down 24% on its lower earnings report and forecast. Advances led declines 9 to 1 in Biotech.
EC BioIndex July 2010
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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, TECH,
TMO, WAT
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EC BigPharma Index - JNJ, PFE, GSK, NVS, SNY, LUN, ABT,
LLY, AZN, WYE, BMY, NVO, BAX, TEVA, KG, ROG.VX
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EB Biotech Index - AMGN, GENZ, BIIB, CEPH, GILD,
BMRN, AMLN, IDXX, ITMN, SEPR, PDLI, CPHD, ALKS, REGN, VRTX, THRX, HGSI, SGMO, NKTR
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Prices are
taken at the close of each month.
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| About Eastwoods Consulting
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Translating Innovations into Profits for the Life Science IndustrysmEastwoods 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 © 2010, 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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