Pharmion Bets That Europe is Alright for Some
Pharmion is an in-licensing based company that has gone where a growing number of biotech companies fear to tread--to Europe. The firm is betting that the marketing infrastructure it has established there, plus regulatory expertise and willingness to take on some development work--even for products with dodgy or downright terrible pasts--will allow it to build a profitable business.
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MedPointe was born via the leveraged buy-out of an old, private pharmaceutical company, Carter-Wallace. Accepting financial strictures was part of the deal; the company must remain profitable. This increases the challenge for the "founders," seasoned pharma execs intent on leveraging the infrastructure they overhauled, to created an in-licensing based marketing powerhouse. Beyond competing with bigger pharma marketers, management's challenge remains bringing in new assets affordably.
Apax Partners paid $120 million for Elan's European sales and marketing infrastructure--renamed Medeus--to buy into the in-licensing game with a ready-made continent-wide commercial network. Few specialty companies can match its scope. But with little or no track record and a portfolio of mostly older, sometimes off-patent drugs, Medeus may nevertheless have to work hard to convince licensors to hand over their products.
Most US biotechs dream of becoming international corporations. But when the chance arises, economic realities often compel firms that retain European marketing rights to assign those privileges to other parties. That's prudent, because the costs and complexities of establishing operations in Europe should not be underestimated, say executives who've been there and done that. Sometimes minimizing risk is the best way to maximize the value of a compound.