Perpetual Innovation

Author: BizMan

  • Happy Days are near, but yet so far away, for Generic Viagra

    The discussion on when pharma patents expire is often long and tortuous.
    The the ED world of Viagra and Cialis we discuss the 2017 patent cliff here.
    True, Cialis patent(s) expire in 2017, so it is reasonable to expect the influx of generics soon… Here’s a list of patents related to Cialis. Note that there are a lot of patents listed that go all the way to 2020.

    Here is a great discussion about the expiration of Phara patents related to Viagra. One of the main patents in viagra falls into the 1995 rule where the expiration date is computed based on the longer of the old method (17 years from issue) and the new method (20 years from first filing date). The 20 years method would be long gone. It probably took Pfizer some very fancy footwork to delay issue of the Viagra patent for almost 10 years from first filing, so the 17 years method computes longest and works best for Viagra. Plus, they got a term extension, so the patent doesn’t expire until April of 2020.

    But generic Viagra. A settlement with the giant of generics, Teva, allows Teva to sell a generic version of Viagra starting in December of 2017. But Teva must pay royalties to Pfizer. Pfizer recently raised prices, presumably to game this whole competition thing ensuing in 2017.

    Levitra faces expiration of patents in 2018.

    Great discussion on all these ED drugs is here at AccessRX.

    Of course you could use another drug that is “a rose by another name”: Revatio. Consumer Reports on Revatiois not in the business of making medical advised, but they suggest the the Revatio blood pressure drug might possibly work in the same way as Viagra since is contains the same active ingredient (sildenafil). 

    There is also a move to try to make the ED drugs an over-the-counter thing. Hmmm.

  • A Good News Story from an Unexpected Source

    Here at IAM-Media is an example of using patents to secure products in a global market.
    Its full strategic management of its 200 patents included creating barriers to entry  and to transform the antenna industry.  This approach does not take place overnight, more than a decade.  The company began initially with patent protected product sales which was quite successful.  Well into the market adoption,  Fractus concluded that licensing for royalties was the best option for the future.  It resulted in over $100m in royalties.

    Fractus also dealt with infringements by major companies and had to be helped by the Spanish courts.  Overall, a good news story about the patent commercialization success of a small company.

  • Scenarios Now and the Genius (hidden) within Crowd via ScenarioPlans.com

    On a sister site, there is a discussion by DelphiMan about the state of scenario planning today, and some new research on ways to squeeze out the genius among laypeople crowds: Scenarios Now and the Genius (hidden) within Crowd,
    Check it out here on ScenarioPlans.com (or DelphiPlan.com).
    First, a McKinsey study showed that CEOs really wished that they had done more scenario planning after the great recession. Before, really. But, now with almost 10 years in the rear-view mirror, it seems likely the idea of such vigilant planning for a flexible future has waned.
    In the meanwhile, the genius of  crowds can still be used very effectively using a Delphi Method approach to capture the expertise of experts (or informed people).
    A very interesting new study used a crowd of laypeople. Even when the crowd is, on average, misinformed, it is possible to identify those people who are really informed and correctly assess the truth.
    This reminds me, but in reverse, of a Lee Iacocca story when he was at Ford (prior to the turn-around at Chrysler). They surveyed people in upscale communities to see if they would like to buy the new Ford sports kind of car being developed including a convertible version. The answer was, unequivocally, NO!.  Lee sent his team back into the suburbs to ask again. But this time the question was two part: “Would you buy this car?” NO. Would your neighbor buy this car?” Absolutely YES!
    The Ford Mustang took the market by stampede!….

    “We are continually faced by great opportunities brilliantly disguised as insoluble problems.” 
    Lee Iacocca … from BrainyQuote.com 

  • XGame Innovation in Carbon Capture

    Look at the great innovations up in Canada in the CCS xGames.

    Checkout the blog at SustainZine related to this very cool competition: http://sustainzine.blogspot.com/2017/01/co2-xgame-winners-in-canada-losers-in.html

    Here’s some info on this big competition in Canada: CBC News discusses competition sponsored by Canada’s Oil Sands Innovation Alliance and U.S. company NRG.

    Normally you think of Carbon Capture & Sequester as a dead cost. Take carbon dioxide out of the atmosphere (maybe at a smoke stack where it is highly concentrated, and pump it down into caverns, maybe where the coal or oil came from. But CO2 is a valuable and sell-able byproduct. Think about the fizz in your pop.

    Maybe innovation like this Carbon XGame contestants have demonstrated, might allow us to burn all the oil and coal in the world without impunity. Maybe if we all hold our breath (one way to reduce CO2), the impact of our non-sustainable ways will not come back to bite us in the proverbial butt.

    SustainZine said: “That means the the job of the CCS might turn out to be far, far bigger in the future, as we try to burn up the last century or so of fossil fuels over the next hundred years.

    We here at SustainZine consider “conservative” this way: The bestest, cheapest, cleanest gallon of gas is the one never extracted, never processed and never burned. The bestest, cheapest, cleanest tonne of coal is the one never extracted, never processed, and never burned (scrubbing or no scrubbing).”  


    In the meanwhile, innovation is the engine that will keep providing options, long after the most obvious alternatives have been exhausted. 

  • Long-term good for R&D, Patents and Profits

    A recent study shows how long-term focus pays off. This study concentrated on switching the CEO compensation to longer-term. From that point forward, what happened, on average to several things related to the performance over time.

    Great study was by Flammer and Bansal (2016) and summarized in the WSJ, CEOs should focus on the long term, a study says. Although the study is coming out soon in the Strategic Management Journal, you can find it here.

    The researchers selected companies that were long-term focused based on those companies that had a long-term compensation package presented to the board that was narrowly approved. The narrowly approved implies that this was a bit of a surprise to the executives resulting, potentially, in a paradigm shift toward longer-term focus. The board voting was reviewed from 2005 through 2012 so that there would be room for performance analysis.

    There are many positives related to long-term focus all around. Companies with a long-term focus do better all around (profits, net profit margin, sales, stock price, etc.). Those long-term focus had a statistically significant improvement over the longer term (2 years and longer). Interestingly, they had a small dip insignificant dip in the short term.

    Longer term companies spend more money on R&D, got more patents, had more patents that “flopped” and had more patents that were “hits”. Flops and hits were based on the citations of their issued patents. Lots of citations means hit, not very many means flop. That has issues, but seems acceptable (unless you want to do a market analysis of the patented technologies).
    They also did a analysis of exploratory vs. exploitive. This was based on 80% vs 20% of the patents citations being internal to the company. So if lots of citations in my current patent refer to my own prior technology then it is a incremental, exploitive patent. They used a log scale on the number of patents, so a 0.568 correlation could be extrapolated on a logarithmic scale! A 57% correlation meaning that the decision to go long-term-centric resulted in a 57% positive change in the patents. Because they argue a cause-and-effect, they are an argument for causal correlation.

    Hits and flops of patents is interesting. First, the patent needs to be more disruptive (exploratory) and new to the company. Then the number of references to the patent were reviewed to see if it gets an abnormal amount of citation activity citing it. Flops would be exploratory that get very low citations. They first combined both hits and flops and indicate that total as a share of all (exploratory?) patents. This is statistically correlated at R-squared of 0.571. Trying a lot results in lots of failures and hits.
    Note that the number of flops and the number of hits were statistically correlated: 0.457 and 0.427. This is very interesting, if you aren’t trying, then you aren’t innovating. In this case, long-term focus means that you are trying and getting a good splattering of both. (They use the methodology here of Azoulay et al., 2011)

    Verdict. Boards should focus on long-term for compensation. This means that they have to be willing to take lesser profits in the short term.

    There are also very strong correlations to the KLD factors, collectively and all four components: employees, environment, consumers and society.
    Verdict. Corporations should focus on sustainable, long-term targets for goals and for compensation.

    They have some limitations to this study, but they also combine it with good literature support for long-term-centric management practices. And minimizing the principle-agent problem common to executive compensation.
    We want everyone highly motivated by the long-term, sustainable success of businesses (& not-for-profits & Gov)…
    Anything else is, well, short-sighted!

    References
    Azoulay P, Graff Zivin JS, Manso G (2011). Incentives and creativity: evidence from the academic life sciences. RAND Journal of Economics 42(3): 527–554.

    Flammer, C., & Bansal, P. (2016). Does a long-term orientation create value? Evidence from a regression discontinuity. Strategic Management Journal. doi:10.1002/smj.2629