M&A activity heats up as biotech IPOs struggle

With investors often reluctant to pay serious money to fund a biotech bet in the IPO market, more and more drug developers are turning to buyouts as the best way to achieve a substantial payout for their early backers. And as a recent story in BusinessWeek makes clear, a long line of pharma companies are more than willing to shell out a premium for a stake in a promising therapeutic program. The buyout math works better, analysts say, as investors can be particularly choosy about money-losing ventures that don't have some stellar Phase II or Phase III data to back up their promises. Taking a check is also a lot less hazardous than letting the market establish your value.

- read the BusinessWeek article on M&A activity