2012: Year of the dealmaker in biopharma
It's no coincidence that two of today's top 5 biotech stories involve late-stage drugs that look increasingly attractive to potential buyers. The surge of buyout stories recently--from Glaxo's ($GSK) move on Human Genome Sciences ($HGSI) to AstraZeneca's ($AZN) deal for Ardea ($RDEA) and the scuttlebutt about a try for Amylin ($AMLN)--has spotlighted just how hungry biopharma companies are for late-stage products. And Dow Jones highlights the trend in a piece looking at the driving factors behind the deals.
"Now, because a lot of biotechs have late-stage assets, prospective buyers are able to be a little bit more specific and more secure in the valuation that they are willing to attribute," Panmure analyst Savvas Neophytou tells Dow Jones.
For Shire ($SHPGY) CEO Angus Russell, the M&A trend is a natural outcome of Big Pharma's R&D restructuring.
"Many of the pharmaceutical companies started producing everything in-house out of their own R&D organizations and over time they've failed to produce enough that way," he says. "So the industry is now coalescing around a 50-50 model of half on your own and half bought in. There are some things we'll do for ourselves but we need to be constantly on the lookout for new technologies."
There's certainly no sign that the M&A trend talk will cool down anytime soon. Bayer is reportedly nearing a deal. AstraZeneca is a buyer. Roche ($RHHBY) is scouting new diagnostics deals. And there's clearly an unsatisfied appetite for buyouts that can be completed in the single-digit billion dollar range. 2012 is shaping up as the year of the dealmaker in biopharma.
- here's the story from Dow Jones
Scrambling to add new drugs, Big Pharma is paying big premiums for biotechs
Rumors put Bayer, Onyx at the M&A altar
Merck KGaA chief swears off major deals amid pipeline woes
Amylin's up for bid. Who'll step in line?