Despite a volatile and uncertain economy, 2009 may be an active year for deals between pharmaceutical and biotech companies. A number of factors, including biotech companies’ difficulty in securing funding and the strategic needs of pharmaceutical companies, are converging to result in a buyer’s market. This could result in an increase in the number of biotech acquisitions by pharmaceutical companies in 2009.
Acquisitions, however, may not be the favored deal structure in 2009 due to an increased focus on risk mitigation. This may lead to an increase in the number of corporate partnering and option transactions, as well as inhibit the completion of acquisitions.
In order to remain competitive, pharmaceutical companies must obtain new products, either internally through research and development or externally through acquisitions, partnerships, or similar transactions. In-house research and development has not filled the void, however, and as a result, pharmaceutical companies have to evaluate acquiring smaller companies with new products, patented technologies, and innovative research teams.