[pcrh]

I was referring to start-ups that are not acquired. For example a VC may fund a range of biotech companies, but only recoup on those that are acquired. Equally there are many examples of drug-based biotech that simply fail for a range of reasons, losing all the money invested in them.

The point being that the general concept that acquired research may be more efficient compared to in-house research would have to account not only for the failed in-house research, but also for the failed research within companies that are not acquired, or which fail for other reasons.

[kgwgk]

> For example a VC may fund a range of biotech companies, but only recoup on those that are acquired.

For those that are acquired they “recoup” much more than their investment. The idea is to get back the total investment in all the funded companies - and the some.

[pcrh]

For an individual VC firm that may be the case, but perhaps not for the whole drug discovery sector?

[amy_petrik]

nature of the beast, high risk early on, cheap, price goes up as derisking occurs. for startups and drugs. risk is priced in. to everything

[pcrh]

The question I was addressing was whether the NIBR was more or less economically efficient than a more free-wheeling culture of start-ups failing or succeeding, with the successes transitioning either to "Big Pharma", or becoming bigger themselves.

The author of the article implies that the NIBR approach was more productive, but didn't compare it to an alternative that consumed similar amounts of capital.