Jazz Pharmaceuticals: The Concept Bet, at a Whole New Level
The press around the size of Jazz Pharmaceuticals' $250 million private financing has obscured the whole point: the company and the financing represent a fundamentally different business model for biopharmaceutical investing and companies: betting on product concepts--not products and not technology.
You may also be interested in...
A day after specialty drug developer Jazz Pharmaceuticals Inc. announced plans to merge with Irish drugmaker Azur Pharma Ltd. in mid-September, the company had something new to celebrate. Jazz’s stock price reached an all-time high of $47.88 per share, giving the company a market valuation of almost exactly $2 billion.
Through what could be a $550 million investment, Invus wants to play for Lexicon the role Roche has played for Genentech, enabling the biotech to finance both its more advanced projects and its discovery programs-something it couldn't do with smaller public market offerings or with lower-value deals on early-stage programs. The financial lynchpin for Invus: the huge prices Big Pharma is willing to pay for Phase II products. Will other private-equity firms follow Invus' lead?
J&J has been Big Pharma's most aggressive experimenter with the drug-delivery and formulations world, but its two biggest transactions haven't provided the value J&J had originally hoped for.