Static & Staticy

10th July 2013

When the search is of existential angst, trust the search engine to fill your bucket of woes.

Why really? 

My question, merely rephrased, is still open - IRR v/s Impact Investing: Do financial institutions necessarily go through this dilemma?

So I now can save some breath by saying 'Impact investing' whenever I have something to say about social impact of investments - that still doesn't mean I get the whole picture now! 

Below is my comment on a recent article on Forbes titled "Pierre Omidyar, Steve Case And Mike Milken On The BusinessCase For Impact Investing"

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Comment:

Earlier in Jan 2013 I posted a poser on my blog titled "IRR v/s Social Impact: Do financial institutions necessarily go throughthis dilemma?"

Even as I am still unclear how social-impact can coexist with bang-for-the-buck at the macro level (~LPs), I see a definite hope in the approach being pursued by Omidyar Network, which made a great start just by terming itself as "a philanthropic investment firm' – The document “From the Field: Lessons Learned in Impact Investing” goes on to showcase how ON takes this moniker seriously – Bravo!!

From all I could see, ON is still an investment firm that’s funded (largely) by its philanthropic founders & there is no ‘raising of fund from LPs’ involved in this unlike most VC/ PE firms that dabble in similar volumes of investments/ portfolio.

That brings me back this intriguing question of how the likes of JPM measure their social impact? – I am sure I am missing something here.

I'm dumb with cool apps 'cos my phone ain't smart when I'm travelling overseas!

Ever heard an international traveler bitch about how cruel the data roaming tariffs can be - well, here i go...

My comment on a recent post on the HBR Group on LI;

Link to the LI discussion:

Follow Ania

Have you ever used Airbnb, Hailo, Uber, or other "sharing economy" innovations?

Or are you opposed to or wary of them because of the legal implications? In this blog post, HBR author Larry Downes explores how these innovations are disrupting traditional economies--and at what price.

Airbnb: A Spare Room for Debate 

Airbnb's legal travails raise the question: how free should you be to rent out your place?

6 days ago

My comment:

Never heard of any till now……. checked them out & loved 'em all.

AirBNB: Sure sounds like something i'll try when i'm travelling and looking for an overnight accommodation next time.

Uber: I am guessing I may not need a chauffeured sedan anytime soon, but am sure excited by the opportunity it provides to make a rather grand exit from a sad rendezvous :-)

Hailo: Hello... this is something I could use when i'm in London or NYC next - my only issues are; a) When in the near future would the corporations of London & NY enable city wide Wifi?.... enabling data on my international roaming plan can be pretty killing. AND b) What if I don't actually know where to stand while 'Hailo'ing the cab? .... just kidding :-)

Getting serious, the bottom-line is that till the time WiFi is all prevailing and FREE in all cities (are you listening Google??..), an international traveler like me will not be able to use many of these cool apps for want of connectivity....

Plan B anyone?

Understanding the consumer's perspective on the future of healthcare is the key to envisioning the future of pharma itself!

While there occurs a lot of ideation & speculation within the industry domain on the future of healthcare & an outlook on pharma variously from 2020 through to 2050, I always still felt there is a crying need for pharmaceutical industry to understand the consumer's perspective on what healthcare scenario should be like in future - This is critical considering the hitherto quintessential 'practitioner-dependent' healthcare consumer is changing rapidly & is looking at an 'iterative' role for himself rather than wanting to being 'prescribed' health literally & figuratively.

While not exactly an average consumer, the pharmaceutical professionals themselves represent a sample population of aware individual consumers whose opinion I believe will give me a much valuable insight into what an increasingly knowledgeable healthcare consumer is looking forward to with respect to health & wellness in 2025 & hence I have decided to reach out to them primarily, to start with & pick some brain.

Through the various forums I have access to, I have already sent out multiple requests to multitudes of individuals to spare a a few minutes of their precious time to fill in the HEALTH 2025 survey as a consumer. I of course will be greatly pleased to have an outlook from the 'non-pharma' aware consumers too & invite the same to provide their valuable input.

The outcome of my small effort looks promising with the total initial responses already reaching 100 across the globe even as I type this post - Not bad at all, considering the survey's been open for only 20 hours now. 

Very soon I will be back to share the results of the above survey & postulate, however minimal, on a few useful trends & indicators.

Wish me good luck folks!

Cipla Ventures - What's the real story Gen-3?

Greed for quality & comprehension makes one less effective & less productive.........
........... Stash away those cudgels people, this is NOT about pharmaceutical manufacturing, this IS about my realization after a month of sub-par blogging that resulted in my number of posts going low (just one article to be precise in June 2013!) and the number of views I get per a month hitting the nadir! - A promise to myself... will try to type out a few "casually turned out" articles every now n then, instead of generating it through my oft employed time-consuming approach of Mull-it-over-for-a-week-Type-it-on-Word-Edit-it-as-though-HBR-were-publishing-it-and-finally-Paste-it-on-the-blog....... Spontaneity ain't dead yet!

Now the REAL topic...

The recent news of Cipla charting new course to achieve a $5 billion revenue in next ten years caught my attention & got me thinking.... Not because a 10 year objective as this is anything novel, but the simultaneous creation of a dedicated investing arm Cipla Ventures, towards this vision, is what interests me. 

Now again, what's so novel about corporate venture capital? its's been around for some time and the trend is bound to catch-on with whichever company that's sitting on surplus cash reserves jumping into the fray if not anything else, as someone said (Super LP??) for the blood & gore and the adrenalin rush that venture investing & enterprise incubation gives.

What interests me is.... 

........ the brief agenda of this arm of Cipla, as reported by Economic times, that says will "weigh the prospect of investing in companies from start-up hubs like Boston and London among other places, in areas such as biotechnology, medical devices and new chemical entity

What interests me is.... 

....... the expansive & prophetic way in which the new CEO Subhanu Saxena says "Out of the five or six bets I place, only two or three need to pay off"

What interests me is.... 

....... what is this "pay off" for which Cipla is ready to take "sensible risk", a novel term for a generic Indian company that has taken the traditionally low risk option of staying close to the home turf?

What interests me is.... 

...... what key takeaway Saxena is walking away with from Novartis & bringing to Cipla?

Let me be clear, I am not insinuating anything unethical here nor I am attaching ulterior motives to a darn-clear writing-on-the-wall business opportunity, all I am doing is trying to get to the heart of matter as to what will Cipla gain eventually through these investments..

Two theories that strike me right away are as follows;

i) TOOL FOR NEGOTIATION:  

The multiple niche stakes & thereby the 'possible' control on the licensing /sale of the pipeline candidates & technologies of the portfolio companies in the NCE, Biotechnology & Diagnostic space will potentially help Cipla negotiate/ barter generic deals with the big pharma companies whose drugs Cipla is/ will/ would aggressively pursue to market in the US & European markets

Will this fly...? despite the generous window of hit-miss offered by Saxena, this is an opportunity completely out in the ether & my guess is as good as Cipla's :-)

ii) EXIT PREPPING OF FOUNDER PROMOTERS: 

Before I am clobbered for suggesting India's most nationalistic  private pharmaceutical company would sell-out, let me remind that no one's above liquidity & no company is unattainable in this corporate game. Let's also remember that the new leadership of Cipla is, surprise, surprise.... of all places, from Novartis, the bête noire of Cipla in many a litigation?? - Let's also remember that the new leadership of Cipla in US & EU is Ex-Teva... the generic behemoth that can make big-ticket acquisitions every now and then (read: $6.5 billion Cephalon; $7.5 billion Barr et al..)

Will this fly...? Of course it'll - the lure is the access to a 1.24 billion strong Indian market.

Anymore theories? 

A start-up messed up at its foundation OUGHT TO be fixed!

The celebrated venture investment guru Peter Thiel postulated a law that says "a start-up messed up at its foundation cannot be fixed" - Bruce Booth attempted a commentary of this law in the context of Biotech ventures through his blog post titled 'Foundings Matter: Thiel’s Law Applied To Biotech' - While Bruce's application of Thiel's law is based on a tacit agreement of the postulation, I believe this can be argued differently, as indicated by some campus talk here...

Below is my comment against the article by Bruce Booth, wherein I agreed and disagreed with the author in two independent contexts....

My comment:
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It bugs me no end just how little the VC & PE literati out there ever attempts to explain all those lurid, smart theories in the context of biotech enterprises instead of solely building case-studies out of super-achieving IT start-ups that brought-in bags of cash to the VCs very early into its life cycle. This peculiar penchant among the authors for avoidance of anything called biotech enterprise I feel is owing to a general investor impatience for acknowledging the veracity of any investment that can’t be cashed out profitably within 3-5 years & thereby not showcased as a text-book case of intelligent investing. While otherwise is a decently thought-provoking & stimulating book, “Venture Capitalists at Work: How VCs identify and build billion dollar successes” by Tarang Shah is one such recent addition to my list of disappointing treatise.

Peter Thiel too probably isn’t greatly different after all, since a lot of the wisdom he’s been postulating is validated only within the narrow context of IT start-ups - Your effort Bruce, at ‘pharmifying’ the ‘Thiel’s law’ is thus a very welcome diversion.

None of the mess-ups you listed right from ‘un-reproducible science’ to ‘inappropriate capitalization’ can be contested as inconsequential in any which way & together these six make a great check-list for the entrepreneur on how not to go wrong initially & for a full-fledged due diligence by the VC either at the initial funding or an informal, abbreviated review prior to subsequent funding rounds. I however am struggling a little bit to accept that the DNA can’t ever be repaired once messed up – isn't disruptive innovation, which inherently amounts to re-coding the DNA of the enterprise /or enterprise's innovation/ business model, an accepted strategy now?

In the June 2013 issue of HBR, Rita Gunther McGrath (Author of “The End of Competitive Advantage”) talks on how the current day enterprise scenario is all about moving away from the conventional ‘Sustainable competitive advantage’ model and instead moving towards “Transient competitive advantage’ – Biotechs' that operate within an ever evolving, dynamic clinical scenario I believe can’t really base their strategy on sustainable competitive advantage & have to necessarily adapt, quickly & efficiently to the transient competitive advantage model & this may necessitate periodic re-coding of the enterprise DNA - What I quote here is what pretty much you and others said earlier regarding the need of emergence of ‘lean-start-ups’.

So instead of trying overtly to ensure all loose ends are tied-up upfront (…including the phantom scenarios!) & showcase a supposedly fine-tuned enterprise DNA to the VCs, the start-up would do good to expand the scope of the business plan to incorporate a well thought through set of situation-appropriate pivots & an alternate disruptive innovation model or two.

My two Rappen*

*on a business trip in Switzerland at the time of posting this article

Shouldn't all pharmaceutical professionals too take the Hippocratic Oath?

The news about the generic drug maker Ranbaxy Labs pleading guilty to felony charges related to drug safety and its acceptance of $500 million in civil and criminal fines created an unprecedented buzz in the world-wide web. The most incisive piece by far appears to be “the epic inside story of long-term criminal fraud at Ranbaxy.....” By Katherine Eban on CNN Money.

No horror story is complete without its share of seedy alleys, murky dealings & closed cup-boards that contain multitudes of hidden skeletons - this too has. Even as all the digging is indeed required towards a total expose’, the associated spill/ shoot-out of emotional rhetoric is threatening to harm the still-early but the strong trend of genericization of global medicare.

Can we raise above the rhetoric of branded drugs v/s generic drugs; first-world v/s third-world & address the core issue of why medical frauds happen & what can be done to plug these? 

My Comment on the above article:

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A very compelling narrative & an alarmingly scary proposition…. 

I fully agree with the majority opinion here that the consequences of a fraud this big should be equally big for the company in question. But again, I also endorse the opinion of a few others like Sam Werbalowsky, Dan Miller et al who have pointed out that Ranbaxy isn't a standalone case in the shameful history of pharmaceutical frauds & that the focus should be on ethical business of all Pharma & not just the generic players as Ranbaxy – It is important to underscore this particular aspect at this juncture since the tone & tenor of this otherwise brilliant piece makes it prone to being construed as a platform for demonizing the generic medicine vis-a-vis' branded drugs. 

A quick look at the list of infamy here & here establishes that the common thread running through all is the disturbing trend of the best-of-the-organizations taking a call of preferring earnings over ethics at critical decision points. Another common aspect among all is the seeming complicity of a vast number of employees at all levels of the organization to misrepresenting a fact or manipulating an outcome. This shows that the problem is not just at the top decision making levels but is endemic at all levels of hierarchy & there’s this shocking apathy all through to what amounts to ethical behavior of an average worker/ employee in a pharmaceutical organization.

Given the complete insulation of an average pharmaceutical employee to the consumer-end of the spectrum & hence insulation from the consequences of any wrong-doing, I'm a little sceptical as to what will motivate these people to be vigilantes of public health & safety at their work place, pardon my cheekiness here, whether or not that involves whistle-blower benefits – THIS apparent lack of ownership of public health & safety in pharmaceutical manufacturing world is what I believe is the real core problem.

While there may be much creative reasoning & some complex solutions to the above core problem, I’d like to keep it simple & say that the reason is a lack of any formal sensitization of a pharmaceutical industry worker prior to or during his/ her employment on her/ his own accountability to public health & safety in general & the solution I hence propose is to instil this accountability in all pharmaceutical employees by way of a Hippocratic Oath that unfortunately is currently merely confined to medical practitioners & decreasingly so.

Food for thought.

Ref: my earlier post at:

http://vishrasayan.blogspot.in/2013/03/factors-influencing-global-prospects.html