This post may go well as a companion to my last two - Actelion's independent mind and Burill's report on Big Pharma blowing $1 trillion.
Fierce Biotech reports from the BD Biotech Conference that successful biotechs say they are trying to stay out of big pharma's clutches but have to work hard to do it. As biotechs are successful in developing their pipelines, they become attractive as potential acquisition candidates from Big Pharma companies trying to fill their pipelines - and with plenty of cash to make it happen.
The biotech CEOs interviewed say these bids come unsolicited and are hard to fend off as the investors ultimately decide if they want to take the money and run. Thus, even if a particular biotech has a good pipeline and business plan they are vunerable to takeover for big cash payment -- but this may not be in the company's best interest. Though shareholders might like to get the immediate payoff and not care.
As I alluded though, this thought process may well reflect how Actelion feels about its independence and it holds the belief that it is more valuble by developing its own pipeline to commercialization. Couple this with the Burrill report that Big Pharm has been markedly unsuccessful in making its acquisitions payoff and you add further fuel to the concept that biotechs with strong pipelines and adequate funding are better off independent to fully realize their value.
What's a biotech in this situation to do? Alkermes CEO Richard Pops says all biotechs can do is try to make themselves look less attractive to larger companies to avoid being swallowed up.
Posted by Bruce Lehr April 13th 2011.