The annual JP Morgan conference has always been a stage for reviewing new solutions to the basic business-model problem of biotechnology. But as Big Pharma's troubles have grown, the conference has also become a showcase for large drug company problems. The quick fix: keep shareholders in the stocks by returning cash to them. Medium term: adopt one of four basic business models. Longer term: disaggregate.

Hologic is garnering more attention these days than it might have in the past because it's just come off an "annus mirabilis." In 2006, Hologic made three vertical acquisitions in the area of breast cancer detection, and it reported stellar financial results. The company is now a market leader in osteoporosis assessment and has an approxmately 50% share of the conventional mammography customer base as well as an early lead in digital mammgoraphy, which is remarkable considering that it is a mid-sized company competing in capital equipment markets against the likes of GE and Siemens.

Six years ago, ev3 was launched aiming at a broad attach on cardio- and endovascular disease. But the company found including coronary devices in its mix too difficult and too costly. Instead, the company shifted directions three years ago, with a focus on peripheral and neurovascular disease. In the process, it hopes to address what it calls "the innovation gap," the lack of devices developed specifically for the PVD and neurovascular specialists.