The other day I received a phone call from a CEO of a pharmaceutical company. During our conversation this person mentioned they were in the process of unloading a non-core asset. I asked for some more details and learned how companies often develop certain valuable technologies. These technologies may be core to a clinical trial and successfully move a drug toward proof of concept. However, it may not be a fit for the company post commercialization. What do you do, retain or divest? Doing either presents additional questions. If you retain, do you build a business unit around it, or just keep it on the shelf? If you divest, are you out to make a profit, breakeven, or donate it and use it as a write off? What I found interesting wasn’t the fact that the CEO has determined to divest the asset, but how they described the process of unloading it akin to someone getting rid of a family pet, “We want to find it a good home where it can grow.” Apparently the technology is very good. So why not keep it? Maybe this is a means of diversifying your company. At conferences, I have heard a mixed message from investment gurus. Some advocate focus while others are proponents of diversification. It is hard to argue against diversification when you look at successful and yet very diverse companies (e.g. GE, 3M, Siemens, Hitachi, Bayer). Conversely, the WD-40 Company (NASDAQ: WDFC) has been quite successful with its rather focused approach. The answer to what to do seems to depend on your corporate strategy, vision, mission, culture and values.
To read the full, original article click on this link: Life Science Leader - Unloading a Core Asset
