The old business model for starting a biotech company-raise venture funds, advance drugs and go public-has changed dramatically, dropping IPOs in favor of buyout deals. An analysis by Bain & Co.--reported in The Wall Street Journal--shows that over the past three years, acquisitions outpaced IPOs six to one. One reason for the switch is that big pharma companies are content to pay a premium for emerging developers. Bain estimates that between 2004 and 2005, the average payout in an acquisition tripled to $170 million.
- check out the article on the takeover trend from the The Wall Street Journal (sub. req.)