Leading biotech companies like Pfizer are increasingly interested in acquisition of smaller biotech companies whose products are in the early phase 2 clinical trials. "Smaller companies are more willing to consider acquisition then they used to be," notes Roger Longman, Managing Partner at Healthcare business information specialist for Windhover information. The possibilities of going public after acquisition is very high for these small companies and is one of these reasons these companies are considering a big pharma buy out.
This year lot of companies have choose acquisition - San Diego based Idun Pharmaceutical and Syrix Pharmaceuticals (Pfizer), TransForm Pharmaceuticals and NeoGenesis, both located outside Botson (Johnson & Johnson and Scherring-Plough).
With most late stage product candidates are not interested by the alliancing partner as late stage alliance are very expensive, and does not give an optimal ratio between price and probability of success. Thus at Pfizer "We tend to go earlier because we have good productive tools, to be able to get to a decision point as quickly as possible", says Martin Mackay, Sr. Vice President, Pfizer. This was the reasons behind acquisition of Idun Pharmaceuticals, in the development of Caspase modulators, which are proteins involved in apoptosis but that remains unproven as a drug target. Pfizer says that it can quickly develop the potential for Caspase targeting compounds, which Idun is developing for broad range of disorders including liver diseases, cancer and inflammation.
Given the uncertainties around the availability of future financing and overall costs of drug development, "Conversation for potentially important products often get to the obvious point of considering an acquisition" summarizes Antony Envin of Venture Capital firm, Venrack Associates.
Source: Nature Biotechnology.