Early M&A: The Secret of Biotech's Success
Executive Summary
As a product-focused biotech with two clinical phase cancer compounds ready to out-license, Wilex stands apart from most of its German--and European--peers. It has got to where it is by virtue of tight focus cost control and an early openness to M&A. Wilex now needs to show it can sign the sort of deals it needs to get to the next level.
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Big Pharmas are beginning to shy away from expensive licensing deals, at least until they begin to see returns on their existing blockbuster agreements. This reluctance is opening the door for mid-sized firms-particularly Europeans-to transform themselves through increased and more creative dealmaking. Moreover, the transition by traditionally in-licensing based firms like Spain's Esteve to out-licensers will accelerate the prominence of Europe's mid-sized players.
European Biotech M&A: Often Last Resort, but Welcome Nevertheless
Consolidation among Europe's biotech firms is picking up, but less for strategic reasons than simply to secure the cash to survive. Whatever the drivers, though, and however ruthless the concurrent cost- and program cutting, M&A should help create better adapted, bigger companies-something investors have long been calling for. Indeed for most merging companies, M&A is just the first step towards more strategic business-building moves in the near future.
Biotech Funding: Where the Money's At
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