financial tool, Maraganore says, for companies that have completed middle and late-stage clinical trials and therefore have a much clearer sense of how their product will really stack up in the marketplace.
At the early stages, because so many things are unknown about a drug candidate, the assumptions are easily manipulated to look the way people want them to look. Just plug in some new assumptions and you can come back with a better-looking financial model, Maraganore says.
“It’s used as a consensus-building approach, and it lends itself to baking the numbers,” Maraganore says.
Not that Alnylam avoids all analysis in favor of snap judgments, like something out of Malcolm Gladwell’s bestseller “Blink.” Like every other company, Alnylam looks at the number of patients with a certain disease (the market opportunity), the strength of its intellectual property, and the competition in a given market. But when it comes down to making decisions on which drug candidates to move forward, Alnylam prefers to bring together a group of scientific opinion leaders to scrutinize all the available scientific evidence at hand, without wearing rose-colored glasses.
“We have to rely on the science. We can’t make decisions on how to develop important new medicines based on a calculation of net present value,” Maraganore says. “For quite some time, Big Pharma has put forecasting from the marketing group ahead of the judgment of their R&D group. To think you can fool yourself into a number, and that is going to make it into a real thing, it’s insanity.”
