Start Up or Buy an Existing Business?

                                                

It’s often a concern of relatively small individual business men. It is also a question for securities investors. So this should be of interest to many of you.

Larger companies often have to decide whether to build their business or a new operation from scratch or buy a company outright, that is, one already in operation.

                       

Many companies, especially in the pharmaceutical business, prefer the acquisition route. It’s expensive because you pay a big premium for a company after it has developed an expensive new drug.

                       

On the other hand, if you attempt to research new drugs, with all start up losses and heartbreak expenses, you have lots of cost as well.

                       

My feeling from my observations is this: In the long run, pharma companies, at least, will pay less for in-house drug product development; there’s a major premium for successful products. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)