The emerging biotech business model typically follows a predictable course: Move your lead therapy through trials to the point at which you can gather positive proof-of-concept data, score a licensing deal. Turn to the next program and repeat. If you're really good at the science and lucky with the results, you get more investment cash and the eventual opportunity to pick between an IPO or a buyout.
It's not terribly complex. It's rarely pretty. But hey, it works. And in these times, you stick with what works.
Fortunately for the industry, the first quarter blues were a prelude to better times for the wheeling and dealing side of drug development. By the second half of the year, deal-making had turned hot. And we ended the year with a blizzard of new pacts as Big Pharma CEOs like Chris Viehbacher at Sanofi, GlaxoSmithKline's Andrew Witty and AstraZeneca's David Brennan avidly pursued licensing pacts and buyouts to stock up on new technology.
In his first year at the helm of Sanofi, Viehbacher spent $9 billion on new acquisitions. And if this past week is any indication, he's a long way from finished. In this environment, it's not surprising that Sanofi, Roche and others are casting a skeptical eye on their own pipeline, tossing programs that don't look like they can either make the regulatory grade or earn much from payers if they can make it to the market.
But in pharma chaos lies biotech opportunity. That point really hit home in 2009. And that sets the stage for another big round of deals in early 2010.