In an article in the Sunday Telegraph titled “How do you turn world-leading British science into medicines?”, John Rountree was quoted in the section of the article that referred to the “Brexit elephant in the room”.

Echoing Pascal Soriot’s comments in the article that all AstraZeneca’s new capital investment was on hold due to the current uncertainty, John commented that with supply chains across different countries, if there are extra barriers and paperwork clearly that will be a deterrent to inward investment into the UK.

While it’s great to see the government and industry and academia getting together for initiatives to create great medicines, the direction that is being taken for Brexit is clearly not helpful. Pharmaceuticals is a collaborative industry, and as such the common regulations and relatively frictionless movement of people and trade within the EU has undoubtedly benefited the industry and patients to date.

With GlaxoSmithKline’s new CEO Emma Walmsley presenting her first quarterly results since taking on the new role, investors were seeking signs of her intentions for the company. A renewed focus and attention to the pharmaceuticals business were the highlights, including the planned divestment of selected R&D and on-market assets as well as a strategic review of the rare diseases unit.

In an article in The Daily Telegraph, Novasecta Managing Partner John Rountree noted that “GSK spends a lower proportion of its total pharmaceuticals revenue on R&D, at 15.4pc, than its main FTSE 100 rival AstraZeneca’s 27.6pc”, and that “It all emphasises the importance the new GSK executive team puts on stability and long-term performance, rather than high-risk and high-reward R&D.” He further added that “It does not fit as well with a view that GSK will be a magnet for developing game-changing pharmaceutical R&D innovation.”

Regarding the rare diseases unit, John’s view was that GSK’s potential sale of its rare diseases activities “will ultimately be good for patients”, explaining: “Investors that are more interested in high-upside with risk can take on this unit and give it more focus and space than is currently possible under GSK.”

 

Novasecta provided perspectives for The Economist newspaper on signs of a new wave of strategic collaborations between pharma companies as an alternative to expensive and often wasteful M&A. Our perspective is that the recently announced collaboration between Merck and AstraZeneca in immuno-oncology is great for patients and the industry: working together rather than simply acquiring a company brings out the best in each company. Over the years we have been proactively catalysing such collaborations for many of our consulting clients as they seek better ways than M&A to build their R&D pipelines, as described in our white paper“Better Partnerships, the Alternative to M&A?”

Novasecta was cited several times in The Economist article, first John Rountree commented that the recent disappointing results from AstraZeneca’s Mystic trial “suggest it is still early days for immuno-oncology R&D, not that there is something wrong with the technology.” Then our research earlier this year into expensive M&A and the increasing trend in revenue multiples was cited, and John added later in the article that “working together is an effective way to mix laboratory talent and to bring medicines to patients”. To view the full article, click here.

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