Tuesday, February 27, 2007

Which Biotech Ben?

As a follow-up to yesterday's post about bioeconomics, those huge pools of red ink: where did the money go? After all, nobody was shredding historic portraits for mouse bedding or running high throughput screens on treasury note extracts. The money went somewhere, but where? If the biotech industry has lost a lot of money, who was making out on the deal?

Employee compensation tends to be a big ticket item, so a lot went to the biotechies (especially the executives). Scientific supply houses obviously took a good sized slice of the pie. Insurance companies get their cut. Real estate is always expensive, plus the gazillion refittings of office and lab space, which means a cut for the construction industry. Outside law firms and financial advisors (deals! deals!) make out well too. Throw in the office supply houses, computer suppliers, travel agencies, catering firms, etc. Academia did well on licenses. It would be interesting to see a tally and figure out which industry did the best on biotech.

Of course, a big chunk of the money went to other firms in the sector -- some as suppliers (Invitrogen, ABI), but more than a little to other money-losing biotechs. For example, my previous employer had deals with Incyte, Xoma, Immunogen and others. I'm sure each of them had further deals with other cash burners in the sector. Some poor dollars might have worn out going from one red ink generator to another.

If the bills animated beings rather than lifeless paper, then what figure would be on the $100 bill? Would it be Dr. Benjamin Franklin, thrilled to be going from one exciting scientific endeavor to another? Or would it be Poor Richard, constantly complaining "Has no biologist ever heard 'A penny saved is a penny earned.'?

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