The inside story

There is really only one thing that sustainable companies must do: make sure the pipeline is full of products that will come on the market at reasonable intervals and provide reasonable levels of revenue. Given the reality of pharmaceutical failure rates, the characteristics of successful business builders are thus fairly straightforward: they spend enough on R&D and do enough partnering and acquisitions to keep the compounds flowing.

What's been going on inside Serono S.A. and ImClone Systems Inc. provides a case in point. In both cases, a review of their business-building activities versus their strategic needs helps explain why both companies have thrown in the towel and are looking to be acquired...