Cubist has the latest and the greatest formulations to combat superbugs in the hospital. Before a recent experience, I would have had no idea why Merck would pay so much for a company that has its chief drug, cubicin, going off patent possibly as soon as 2018.
First, we have had CEO Mike Bonney on several times for the show. Each time, he impressed me as someone who was after unmet needs, specifically diseases unique to hospital patients who catch them and are often killed by them.
I had been very skeptical of the company because of the patent issues. We know that no matter how terrific a drug might be, when it goes off patent, the margins are killed and they take the stock with it.
However, management made it clear that the pipeline was filled with new drugs that could attack diseases specific to hospital stays, and the company was well ahead of everyone else with some important phase three trials that could make a real difference.
Each time I spoke to the management of Cubist, I was astounded at the size of the unmet needs and the logic of shortening the hospital stay. The company had made some terrific acquisitions of companies that had formulations to stop hospital-related diarrhea, as well as a hard skin disease.
The second reason I am intrigued and excited by this merger has to do with a sad recent personal experience with my late dad at a hospital in Philadelphia. You see, he had entered the hospital with a broken hip. Pop had become frail, but he had all his senses and was very clear-headed, when he spoke to me right after the break. He was rushed to a hospital, and unfortunately he had to wait for a bed and for treatment. My sister and I had to push really hard for him to get a timely operation, because the longer an elderly person has to wait, the less likely he would have a quick recovery.