An Independent Pharmacia Diagnostics Charts an Independent Course
Two private equity firms' acquisition of Pharmacia Diagnostics from Pfizer underscores private equity's growing but still selective interest in European health care and opportunities in a field overlooked by mainstream diagnostics companies, allergy testing. The new owners are paying nearly $600 million in a bet on Pharmacia Diagnostics' long-time management's ability to take advantage of the growth potential of this specialized field.
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The popularity of DPC's random-access immunoassay system, the Immulite 2000, has helped the company become a significant player in the highly competitive automated immunoassay market. But DPC's benefited from some good luck--namely the misfortunes of top player Abbott Diagnostics and the slow efforts by other competitors to step into the gap left by Abbott. DPC's dilemma is whether it can maintain its narrow focus as Abbott re-emerges and other competitors get stronger.
Unlike other major companies, Pfizer has successfully counterbalanced the disappointments of its internal R&D with the certainties of other companies' marketable products--first through co-promotions, and later through acquisitions--and its own sales capabilities. But things seem to have changed: by acquiring Pharmacia, Pfizer does as much as it can to assure investors above-average industry growth for the next several years and dilute the impact of the genericization of major products in 2006-7. But the deal also may limit Pfizer's ability to access new late-stage compounds, and thereby hedge the risk that its own pipeline won't produce, as potential licensers evaluate the implications of hooking up with a company which has gobbled up its two most important partners. Instead, Pfizer must depend on M&A to counterbalance risk of R&D failure-but given stronger anti-trust concerns and Pfizer's own breadth of R&D and product line, its acquisition choices will be limited. Nonetheless, with its near-term growth problems settled, Pfizer has created for itself important breathing room unavailable to most of its competitors--and thus greater ability to take advantage of new opportunities that develop.
High-profile experts including Anthony Fauci and Adrian Hill share views at the ICMR symposium on progressing safe COVID-19 vaccines backed by ethical trials executed with appropriate scientific rigor. Human challenge studies, "vaccine nationalism" and equitable access were among the key issues deliberated, while India committed to making its coronavirus vaccines and related capabilities available to the world.