Albany Molecular's Next Act
This article was originally published in Start Up
Executive Summary
In the fast-growing chemistry services market, Albany Molecular has proven itself a steady and, in recent times, superlative performer. Albany Molecular is capitalizing on its growing revenue stream and strong market performance by building up chemistry capabilities to provide one-stop, albeit specialty, shopping. But the company's growth and above-average margins stem largely from its one major royalty deal, on Allegra--and the company has been spending its time on services, not on at-risk deals.Recent acquisitions position Albany Molecular to provide more proprietary technologies: the key is whether the company's management is willing to take the financial risk of deals in which it has to fund its own early development in order to win an important piece of a product's upside and thus boost it service-company margins.
You may also be interested in...
Psyche Pharmaceuticals Inc.
Psyche Pharmaceuticals aims to commercialize a technique for the chemical synthesis of proteins, which theoretically allows for the insertion of unnatural amino acids and thus, custom design of therapeutic proteins. The new method combines aspects of solution-based and solid-phase approaches to peptide synthesis, and also harnesses mass spectroscopy. For now, the start-up aims to sell peptides, particularly chemokines, into the research market.
Psyche Pharmaceuticals Inc.
Psyche Pharmaceuticals aims to commercialize a technique for the chemical synthesis of proteins, which theoretically allows for the insertion of unnatural amino acids and thus, custom design of therapeutic proteins. The new method combines aspects of solution-based and solid-phase approaches to peptide synthesis, and also harnesses mass spectroscopy. For now, the start-up aims to sell peptides, particularly chemokines, into the research market.
ArQule Takes the Drug Discovery Plunge
Over the past two-and-one-half years, ArQule's new management has refocused the once divided company, and repaired its reputation in the eyes of the financial community. That leadership also decided that ArQule can reach its growth potential only by moving away from a fee-for-services model and becoming a full-fledged drug discovery company. It's a transition that few companies have successfully managed, in part because of the tough balancing act required to build the requisite R&D infrastructure, while devoting sufficient resources to the near-term activity needed to build that infrastructure. ArQule will likely try to acquire biology-based companies to gain control over its own targets, but must deal with the valuation imbalance that still favors genomics/biology firms. But ArQule's management believes that its technology platform--as enhanced by the addition of predictive ADMET modeling--will boost its ability to process target into targets and thus its value.