The Challenge of Understanding Biotech: Sifting Through the Fog and Jargon

10/20/10

I recently enjoyed reading two books on the mortgage meltdown, “The Big Short” by Michael Lewis and Gregory Zuckerman’s “The Greatest Trade Ever.” They each provided a detailed post-mortem on the implosion of the housing bubble. What fascinated me most about their accounts was how virtually everyone on Wall Street, with a few notable exceptions, was completely wrong about the stability and direction of the housing market. This, of course, fits the classic definition of Groupthink, a term coined by social psychologist Irving Janis to describe faulty decision making that results from a deterioration in “mental efficiency, reality testing, and moral judgment”. The lesson I took away from this is crystal clear: you must think on your own, forming your own opinions from the data in front of you. Remember that the “experts” are not always right, and indeed, are often very wrong.

Is Groupthink a problem for the Pharma/Biotech industry? A recent summary of “Pharma’s Biggest Flops” readily illustrates that both companies and the analysts who cover them can, from time to time, be dead wrong in their pronouncements and expectations. However, I only see weak evidence of Groupthink in BioPharma, nothing anywhere near the scale of what was seen in the mortgage meltdown debacle. Pharma and biotech are a much more fragmented and diversified industry than the mortgage business, and as a result it is much more resistant to having everyone think the same way. It is also harder to place specific financial wagers either for or against the industry in general, especially since many biotechs are not publicly traded.

So how does one avoid getting sucked in by industry Groupthink? Critical reading and thinking are the best defense against this problem, but this requires a serious brainpower commitment. I spend a lot of time reading and, more importantly, thinking about where the industry has been and where it is going. Science journals, newswire reports, and industry missives fill my computer screen on any given day. I know that many of you share my pain: so much information to process, so little time.

We all deal with information overload. More and more, however, I find myself spending inordinate amounts of time trying to understand a single number or the ramifications of a particular finding that are either poorly explained or don’t make sense. A lack of clarity can simply indicate poor writing, but it often reveals sloppy thinking. Herman Melville said it very well: “A man of true science uses but few hard words, and those only when none other will answer his purposes; whereas the smatterer in science thinks that by mouthing hard words he proves that he understands hard things.”

Consider the simple phrase “….. is the best selling drug.” What does this mean? … Next Page »

Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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  • natalie

    Well-written

  • http://www.austinpreclinical.com Eric Austin

    Hilarious and unfortunately all too true. I have had similar thoughts as yours Stuart but you have done a great job of getting it down on “virtual” paper for all to enjoy.

  • JC

    I’m amazed by the continuous “group think” inside the industry and companies vying for approval themselves. They are so sure they will be approved they bet the farm, build out expensive facilities and hire loads of people who all too soon will be laid off.

    Always makes me wonder what they know that no one else does, but alas the FDA continuously surprises us with delays or outright dis-approvals (Amylin the most recent notable).

    With all of the sophistication, investment and science of our modern era, I find the process, expectations and execution of getting products approved still archaic.

  • Peter

    Nice job! I always try to read the Numbers Guy, Carl Bialik, in the Wall Street Journal. As a mathmetician he tries to rationalize some of the numbers that frequently are quoted. For instance, he recently wrote about and largely debunked the oft-cited “statistic” that 10% of the drugs sold are counterfeit: http://blogs.wsj.com/numbersguy/dubious-origins-for-drugs-and-stats-about-them-990/. We need more fact checkers, but as you point out, it is not easy to trace down the origins of many of these numbers.

    The best example of “group think” is what happens in big pharma when senior management changes its philosophy on the “right” way to discover and develop drugs. They often end up criticizing their own ideas of a few years earlier and then expect the entire organization to adopt their “new” ideas. Of course anyone who disagrees is criticized for not being a “team” player and is usually swept out in the next round of layoffs.

  • John

    Great stuff, well presented. But it isn’t only the life science industry that plays fast and loose with facts and language. Yesterday I read of a highly successful aid program that distributed $200M to 25M people. That $8 per person was life-changing aid.

    Is part of our “evolving” journalism industry dropping its fact checking role?

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  • Anthony Rodriguez

    In every sector from academia to politics, people are irresponsible with numbers. The lack of transparency with the information that is pushed in today’s web-based society is sad. Like Stewart, I will all too often stop my due diligence as soon as the source asks for a credit card number. Its just easier and cheaper to take these statements at face value. I applaud journals like PLoS who allow for researchers to post their RAW data online with their article free to access for anyone. Will we ever see something like this become a standard across all sectors? I hope so, but I am not holding my breath.