A past article from Pharmalive.com:
Pharmaceutical companies keep turning to the biotechnology industry to secure promising candidates to enhance pipelines and replace drugs losing patent protection. Big pharma is tapping biotech through an ever-growing number of partnerships and a new wave of outright acquisitions. These acquisitions represent a win-win relationship. The big companies require growth, and the small companies need help bringing their products to market.
Companies such as AstraZeneca, Pfizer Inc., Novartis, Schering-Plough Corp., Johnson & Johnson, and GlaxoSmithKline are more interested in acquiring smaller biotechnology companies that have promising products in development. The possibility of going public after acquisition is among several reasons that biotech companies entertain a big buyout by pharmaceutical companies. For the biotechnology companies, acquisitions become attractive particularly when a potentially high-impact product is in development. Given the uncertainties around the availability of future financing and overall costs of drug development, some biotechnology companies seek assistance.
"Pharma is now using buyout and partnership deals more strategically," says Neil Kurtz, M.D., president and CEO, TorreyPines Therapeutics (torreypinestherapeutics.com). "By that, I mean two things — they are not just looking to replace a product in the marketplace or near term; they are looking at product candidates to fill in the pipeline at all stages of development as part of portfolio management.".