New licensing deals and big venture rounds remained a staple of our coverage right through the end of the year, and will remain that way in 2008. For PricewaterhouseCoopers, which just did its big annual review of healthcare trends, the surge in deal-making between Big Pharma and biotechnology was unmistakable.
"In the first quarter of 2007," reports PwC, "life sciences firms recorded the most deal activity and the highest dollar amounts for mergers and acquisition deals than any quarter in their history. With these collaborations, life sciences companies are now driving the industry whereas big pharmaceutical companies once had a significant advantage. To fill the pipeline and accelerate innovation, look for greater collaboration between pharmaceutical and life sciences companies through mergers, collaborative risk-sharing, joint ventures and other co-development and co-promotion arrangements."
Big Biotech--a select group of companies--was clearly just as interested as Big Pharma in new collaborations. You could see that in evidence at Amgen as well as Genentech, which both signed up with smaller outfits advancing new technologies. For Amgen, the focus is on staunching an open sore as its anemia drugs take a hit. For Genentech, partnerships are a way to keep the music playing for its hit parade.
Emerging biotech companies, particularly in the U.S., also continued on a roll through 2007, with venture capital groups anxious to get a piece of equity in new companies with promising technologies and drug candidates. For several years now, venture capital has been edging steadily away from early-stage companies, looking to inoculate itself against risk in one of the riskiest businesses on the planet. That made later stage rounds for biotechs in or through proof-of-concept trials easier to raise, but made life in the A series a little lonelier.
Meanwhile, FierceBiotech has chronicled a number of new companies that are being structured to take advantage of approved therapies for new indications--an innovative twist that can breathe new patent life into a safe, proven product.
But not every funding option had a stellar year. When you talk to the emerging drug developers these days, you're just as likely to hear them talk about a potential buyout as an eventual IPO. The public markets, which bulled their way right to a late-year market correction, remained skittish about biotech public offerings and chilled more than one company's plans to travel the public market route to expansion.