Biopharma execs predict a big spike in M&A deals

Marks & Clerk polled a broad segment of executives in the global biopharma industry and tapped into a strong belief that the pharma industry's looming patent cliff will drive a big round of biotech acquisitions over the next two years.

A whopping 8 out of 10 executives among the group of 381 polled believe that Big Pharma does not have the internal R&D resources needed to overcome the approaching loss of revenue as blockbusters lose patent protection. And that figure is closely related to the 7 out of 10 who see a wave of new acquisitions ahead. That's a particularly significant sentiment for innovative biotech companies, which often groom themselves for an M&A deal with a deep-pocket pharma outfit.

"Pharmaceutical companies may now have confidence and the support of institutional investors to press ahead with acquisitions although at this stage, selecting the right acquisition targets will be critical to their future R&D success," says Gareth Williams, a partner at Marks & Clerk. "This may explain the 84% who believe the market is now confident to plough forward with strategic collaborations--they are determined to cherry-pick the best targets, while increasing reliance on patent term extensions buys them some vital time ahead of making a move. What is being predicted is not necessarily driven so much by desire as urgency."

- here's the story from Dow Jones (subs req.)