Intellegence: Resources on the Web, Sharon Locken, President, Locken Information.
More Sales and Profits from Existing
Cay Villars, President, Market Value Concepts.
Importance of Brand: Research
Products. Bill Kelly, President, BioInformatics.
New Marketing Strategies in Research Products. An interview with Bruce Lehman,
President, Lehman Millet, Inc.
BioTactics Parners program -
how it benefits your business.
New Job Postings
||Consolidation: New Marketing
Strategies for Thriving in Research Products, p 1.
|an Interview with Bruce Lehman, Lehman Millet, Inc.
The Life Science Industry has been following a solid consolidation over the last few
years. What purpose does this serve the companies (and the customers) in Life Science?
here is clearly a trend to
widen the gap between the increasingly larger companies and the small companies. This
trend mirrors the consolidation occurring throughout the health care industry. In
diagnostics, devices, pharmaceuticals, hospitals and distribution, large companies are
building more mass, a greater market presence. With regards to Life Science, consolidation
appears inevitable, not only because of pricing pressure from more centralized purchasing
and the fact that an increasing number of products are becoming
"commodities,"but also due to the increasing pressure to innovate.
Consolidation provides for cost efficiencies, of course, the benefits of
which should be found in growing R&D budgets or the bottom line ... or both. More
important, perhaps, the deal-makers believe in strategically synergistic opportunities
that can be gained from a variety of technology platforms. This should enable them to
drive more innovation to market.
At the same time, small companies in the industry, particularly the
drug discovery and development variations like Affymetrix, ArQule and Dyax, have done very
well. They provide a wellspring of innovation that remains an essential element of true
growth in the industry. Opinion leaders in the research community learn about innovation
via literature, scientific meetings, and increasingly, the Internet, etc. not just from
the field sales. Small companies can move quickly and are opportunistically responsive to
thought leaders ideas for new products and process improvements. However,
distribution and market reach is a challenge for these small companies. It is natural that
they will continue to license their products, partner, or be sold to larger companies in
order to reach their customers.
What are the key benefits to consolidation?
or those who sit in the
driver's seat of the consolidator companies, there is a greater ability to profitably
respond to pricing pressures because major customers can realize economic benefit in the
bundling of a broader portfolio and the opportunity to bring innovation to the
distribution of products that can be provided by very large companies. At least as
important, the larger players can come much closer to offering truly integrated total
solutions to their pharmaceutical and biotech customers by bringing to them up and
downstream integration in a way not done before. This should lead to more solid,
defensible, longer term customer relationships than those simply based on price or single
product innovation. However, there is concern among customers that consolidation will
actually drive prices up.