nova

Biotech Buying Binge About to Begin?

Presently Big Pharma companies suffer from lack of vision. They became drug marketing companies.

Dealing with biotech companies, Big Pharma can either acquire biotech or have a partnership agreement.

A good partnership has many advantages:
- it removes a lot of risk for Big Pharma, i.e., they do not have to pay a lot for buying a failure
- they can buy a partner at a later date

The only problem with a partnership is when a biotech has good management and is more than one drug company. In this case, an acquisition at a later date may be impossible.

The best acquisition candidates are biotech companies with a very good pipeline and bad management. The best names coming to my mind are AMLN and IMCL.

Finally, with falling US$ , I would expect a strong acquisition drive by foreign companies. They can afford the best [such as DNA by Roche, MLNM by Toshiba, etc.,]