[christoph]

Well yes. But the pay off for a "blockbuster" (or two) more than makes up for all the aggregated losses. Hence why the massive pharma companies still exist, operate and, generally post massive profits YoY. You can easily absorb multiple $x-hundred million losses when your blockbusters are happily pulling in $5bn a year, YoY for 5+ years (with minimal expenditure). Years ago, somebody very senior at JnJ told me how the company really wasn't a pharma company at all, it was actually a focused, strategic accounting business.

They weigh up all their current & future pipeline almost daily in terms of risk/reward monetary values. I'm not really sure I feel a great desire to shed a tear for big pharma. They always seem to do alright when their results get posted at the end of each financial year. I've wrestled with the debate as to whether human medicine development/discovery is best done in this environment for a long time. And, I still haven't decided. Competition is good/healthy, but financial drive seems to be trumping the human/healing element more than ever.

In the last decade, it feels like they've spun most of the risks out to the small biotech startups, who they'll all get into a bidding war over once a potential product shows a vague shred of promise/monetary value. I'm not discounting the fact that the hills aren't littered with the hundreds of corpses of failed "promising" new biotechs/drugs they pumped hundreds of millions into for absolutely no return at all. I'm just not convinced the whole ecosystem is the best long-term strategy for human health. I guess that's what I'm really trying to say.

[refurb]

Be careful with your survivorship bias.

Plenty of large pharma companies have effectively disappeared over the last few decades - typically because the "big bets" failed and they got swallowed up by some larger player who wants to add to their portfolio.

Add in all the biotechs that spend tens or hundreds of millions on R&D and get $0 in the end, biotech is far from an "easy" business.