When AstraZeneca briefly became the largest company in the FTSE 100 earlier this summer its ascent appeared to dovetail neatly between strong investor appetite for pharmaceuticals and public hopes of a Covid-19 vaccine.
Big Pharma does not become so big without a certain ruthlessness. For every blockbuster drug the largest firms develop, many treatments fail to make it – or are cast aside when their earnings potential starts to wane.
A beneficiary of this trend has been Clinigen, a star of the Aim market, which has been built up through a bout of deal-making.
The company has developed a three-pronged business model that has embedded it in the global pharmaceuticals industry. First, Clinigen supplies drugs for clinical trials, a stringently regulated activity that is being outsourced by Big Pharma to specialist firms.
Regulators rightly demand that trials are beyond reproach, so the careful packaging and labelling of drugs that means participating patients have no chance of identifying the placebo is big business.
Second, the company sources unlicensed medicines that can be prescribed in special circumstances to named patients. These could be drugs that have yet to gain regulatory approval or are being supplied to patients in smaller markets that Big Pharma has deemed not to be commercially worthwhile to seek clearance in. Increasingly, Clinigen can be the sales channel.
Third, its commercial medicine arm, which contributed 44pc of profits last year, capitalises on the knowledge gained elsewhere in the business. Clinigen buys licences for drugs apparently nearing the end of their life and finds new uses for them.