Burill and Co says Big Pharma blew it with its M&A activity over the past decade. This published in a new report called Biotech 2011-Life Sciences: Looking Back to See Ahead.
The major finding in the report? Big Pharma destroyed $1 trillion in value over the past decade. That trillion in lost value is comprised of a decrease in market captilization of 17 of the industry's most active acquirers of $530 million plus an added $425 M spent on the acquisitions = nearly $1 trillion.
To update and paraphrase Everett Dirkson, "A trillion here, a trillion there, and pretty soon you're talking about real money."
Looks like it is time to go back to the business model drawing board. Companies are now looking to acquire smaller biotech's for their innovative pipelines but are being more careful not to assimilate them into their massive R&D structures (bureaucracies), or may be breaking their own massive R&D groups into more manageable (and agile) small units.
Burrill says, "If the industry is to return to the type of growth it once enjoyed, it must innovate its way out of its current predicament."
Posted by Bruce Lehr April 13th 2011.