In a previous blog post, I argued that pharmaceutical Research and Development (R&D) is more like poker than chess given the probabilistic nature of developing new medicines. In this blog, I build out this argument further and introduce a new concept, the Critical Value Creation Period (CVCP). The CVCP is the moment in R&D where the probability of success (PoS) for an investigational medicine becoming a new medicine jumps substantially. For most investigational medicines, this period is in early clinical development. By analogy, early development is like the “flop” in Texas hold ’em poker. Stay with me on this one…hopefully this will become clear by the end of this blog post!
Here, I first build out the CVCP argument, which is modeled after an investment thesis proposed by Bain Capital Life Sciences (see here for a presentation by Dr. Adam Koppel at BCLS). Then, I introduce the poker analogy – with focus on the flop. Next, I discuss practical implication of the CVCP model on decision making in biopharma. Finally, I provide two brief case studies that reinforce these concepts. For those not interested in poker, you can skip the second section and focus on the first, third and fourth sections.…