The Better Exit for Private Biotechs: M&A
This article was originally published in Start Up
Does the recent flurry of acquisitions of private biotech companies by pharma companies represent a new and continuing trend? Yes--and a real change in thinking at Big Pharma and among VCs.
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Pfizer's acquisition of privately-held Angiosyn is basically a milestones-and-royalty-based licensing deal for the biotech's preclinical non-VEGF targeting AMD candidate. Angiosyn was designed for early M&A, much like most medical device firms of the past ten years, and this risk-sharing agreement with Pfizer may imply a new, leaner model for biotech company building.
Perhaps the loudest message from the biopharmaceutical side of the JP Morgan conference was: "Change the Big Pharma model." The theme was pervasive-in discussions of the most interesting products; among the biotechs; indeed in the Big Pharma presentations themselves.
The Homeland Investment Act will allow Big Pharma to bring into the US a huge horde of foreign earnings at very attractive tax rates. Given the pipeline drought, some of that money is going to go to biotechs.