At in the Pipeline, Derek Lowe applies a Wired article on David Li's formula that allowed Wall Street to make vast amount of money (while overlooking the formula's limitations, which ultimately is crashing down around their ears) to drug discovery and development. Lowe says many of the examples in the Wired piece can be extended to that industry:
"What are the risks of each compound in Company X's pipeline failing? If a compound with a similar mechanism wipes out over at Company Y, how have the odds now changed? What about patent risks - if a Supreme Court decision makes everyone rethink issues of infringement or obviousness, how correlated are the patent-busting exposure around the industry? And so on…" he writes.
Lowe adds that the difference is that pharma hasn’t quite convinced itself that everything's all figured out nor has issued securities.