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The Global Collapse of the Oncology Market

Credit: bunhill/iStockphoto

Credit: bunhill/iStockphoto

By Martin Ashdown

A new approach to cancer treatment promises the use of fewer drugs and shorter treatment periods, leading to a “big short” of stocks that profit from oncology.

The full text of this article can be purchased from Informit.

The cancer industry is literally a “growth” industry worth hundreds of billions of dollars per annum. A lot of people make a living out of cancer, and each year the market expands: global estimates predict 6.5 million cancer fatalities this year.

While the industry’s outdated practices haven’t significantly improved outcomes for patients in decades, they are now being replaced by a new paradigm of immune-based cancer therapy. This new therapeutic approach “tweaks” the individual patient’s immune system to destroy the cancer – and it works.

This seismic shift portends the overthrow of a traditional business model’s value chain, with potentially broad economic consequences. If cancer becomes curable, the cancer sector’s valuation would collapse along with careers, companies and downstream effects to other sectors.

Fanciful a few years ago, this scenario is now being played out with significant aspects of the cancer industry now under assault. In 2014 global pharmaceutical giant GlaxoSmithKline off-loaded a significant portion of its cancer drug portfolio to another corporate giant, Novartis, for US$16 billion. Other major corporate players are now moving into the new era of cancer immunotherapy, buying companies at inflated prices. For instance, Gilead recently purchased Kite Pharmaceuticals for US$12 billion. More recently, Australian biotech...

The full text of this article can be purchased from Informit.