Is biotech becoming another Big Pharma?

The Wall Street Journal takes a close look at the maturation of the biotech industry, from the heady days of the early 2000s when it seemed the sky was the limit, to the return of reality as stock prices dropped and established biotechs began to wrestle with many of the problems once reserved for Big Pharma. "Has biotech grown into another big pharma?" asks the WSJ's John Jannarone. "As biotech firms expand, many face the same difficulty developing new drugs that has stifled revenue for pharmaceutical companies."

Take Genzyme, which has made $6.3 billion in acquisitions in the last decade. Those deals have been slow to add to the company's bottom line. And while Biogen has made major investments in its pipeline, its annual revenue growth is expected to grow only 6 percent between now and 2013.

These companies could turn to consolidation with a larger pharma company. Biogen gave it a try last year, but when no bidders appeared, the biotech took itself off the market. Jannarone concludes that Big Pharma may not be able to justify issuing stock needed to fund large deals; even if they can pull it off, history shows that acquisitions are by no means a pipeline cure.

- read the WSJ article for more