Issue Date: October 1, 2012
Other Measures Of Success
C&EN does an excellent job covering business deals related to pharmaceuticals and biotechnology. I’m writing to suggest a broader set of metrics to measure success, other than the current notion of total sales in U.S. dollars.
Your reporting standards, and those of most news sources, relate the output of a company or importance of a product in terms of sales. I’d suggest some other metrics to measure success from the point of view of patients and investors: 1. a simple count of the total number of patients/consumers; 2. an estimate of change in total health-adjusted life expectancy (HALE, a metric developed by the World Health Organization) for those consumers; and 3. equity capital efficiency (following Bruce Booth’s blog, Life Sci VC, lifescivc.com) or simple percent return since inception to measure the outcome for investors in private firms.
Measuring number of patients, we might find that a patent expiry is a net gain for the unwell but a net loss for a set of publicly traded companies. Measuring equity efficiency, we might find that some firms with huge sums of capital invested and sales in the millions of dollars actually offer a very poor investor return. Ted Turner famously pointed out that money is a way to keep score in the game of life, but I hope it is not the only way.
By Lucas G. Nivón
- Chemical & Engineering News
- ISSN 0009-2347
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