The Heyday of Biotech Dealmaking
Deal values and perks are up for biotechs; the Pharmaceutical Strategic Outlook conference suggests Big Pharma might begin to borrow some biotech strategies.
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According to Gene Logic, there's value in failed Phase II candidates-so long as safety's not the problem. The company claims that repositioning a compound in a new indication creates an asset worth 27% more, in net present value terms, than an equivalent in-licensed drug.
With clinical failure rates rising industry-wide, a skunkworks at Lilly, called Chorus, has been trying to boost likely-to-succeed shots on goal by getting compounds to human proof-of-concept far faster and cheaper than the internal organization. Lilly's R&D group is skeptical about the program, even anxious -- one reason Chorus has teamed up with a major venture fund to get more molecules to test. If the program works, will Lilly embrace it - or will its venture partner reap the rewards?
A review of the past five years' significant ($100mm or greater) pharma-biotech acquisitions among the industry's largest players illustrates Big Pharma's diverging M&A strategies, and why there's more to come. We examine who's buying and how much has been spent, and take a look at who has succeeded in getting value (and pipeline) for money.