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Published by: Decision Resources
Published: Sep. 15, 2009 - 36 Pages
Table of Contents
- Executive Summary
- Strategic Considerations
- Stakeholder Implications
- Stretched to the Breaking Point
- Clear and Present Dangers to Biotech and Pharma
- Biotech’s Depleting Cash Reserves and Demands for Cash-Outs
- Liquidation
- Layoffs
- Cash-Outs
- Pharma’s Changing Sources of Growth
- Specter of Comparative Effectiveness
- Threat of Biosimilars
- Biotech’s Dream of the Past Three Decades Has Eroded
- Staying Alive—Biotech’s Short-Term Imperative
- Life-Saving Cash Injections
- RDOs and PIPES
- Corporate Venture Funds
- Life Blood from Collaborations
- Virtualization
- Hibernation
- Consolidation
- Big Pharma Turns to Other Big Pharma for Strength
- Recent Collaborations Between Big Pharma
- GlaxoSmithKline Collaborates with Pfi zer on HIV
- Joint-Venture Strategies
- Gilead’s Strategies
- Takeover Possibilities
- Future Merger?
- Trend?
- Emerging-Markets Lifeline
- Emerging Markets
- Combined Brand and Generics Push
- No Overnight Miracles
- Mid-Tier Pharma—The Law of Unintended Consequences
- Mega-Mergers
- Eli Lilly: I Am Biotech
- Bayer Schering: Don’t Put All Your Eggs in One Basket
- Takeda Pharmaceutical: A Balanced Global Presence
- Strategies for Moving Forward
- On the Horizon—A More Unifi ed Biopharmaceutical Industry
- Tables
- 1. Biotechs Out of Business, 2009
- 2. Biotech Job Losses, January Through June 2009
- 3. Several Biotech Financings, First Half of 2009
- 4. Select Pharma-Biotech Collaborations, First Half of 2009
- 5. Select Biotech-Biotech Collaborations, First Half of 2009
- 6. Select Mergers and Acquisitions of Biotech Companies, 2008 and 2009
- 7. Collaborations Between Big Pharma
- 8. HIV Drug Portfolios: Pfi zer and GlaxoSmithKline Compared with Gilead Sciences
- 9. Gilead Sciences’ Drug Development Pipeline, July 2009
- 10. Top 20 Worldwide Pharmaceutical Markets, 2003, 2008, and 2013
- 11. Companies That Disappeared After a Merger
- Figures
- 1. U.S. Venture Capital Investing: Number of Deals, 1995-Q2 2009
- 2. The New Virtualized Biopharma Business Model
- 3. Top 25 Pharmaceutical Companies Based on 2008 Worldwide Sales
AbstractThe biotechnology and pharmaceutical sectors as we know them will soon cease to exist. Companies in these
sectors have come face-to-face with the harrowing ordeals of a global recession. Four stresses on the industry
are rapidly depleting cash reserves, changing sources of growth, the specter of comparative effectiveness,
and the threat posed by biosimilars. Staying alive in the short term and creating a more viable way of doing
business are serious concerns. Many biotech companies have put themselves on ice with skeleton staffs in an
attempt to ride out the recession, but they may never recover their scientifi c momentum. Mid-tier pharmaceutical
companies are scrambling and fear for their independence. A new world order is on the horizon that will be a
more unifi ed biopharmaceutical industry. This report addresses the issues underlying the evolving nature of the
biotech and mid-tier pharmaceutical sectors and identifi es strategies and opportunities for moving forward.
Questions Answered in This Report
- According to the founder of Excalibur, a medical sciences investment house, biotech is facing “the most serious,
dire situation that the sector has ever been in.” What strategies are companies using to survive? What
strategies will have better chances of success?
- Burrill & Co.’s CEO has said, “The technology we’ve developed over the last 40 years is great at keeping us
alive, but it’s not economically viable.” What are the alternative strategies? Is cost-effectiveness research
the answer?
- Sanofi -Aventis’s CEO has said, “If you can partner, why acquire?” How has the nature of biotech-pharma
collaborations changed? What is the prime directive of cash-strapped biotechs?
- Eli Lilly’s and GlaxoSmithKline’s CEOs do not believe that mega-mergers bring the added value that they
should. What strategies does GlaxoSmithKline favor? What recent deals has the company executed?
Why is Lilly confi dent of its ability to remain independent, and how will it do so?
- Mid-tier pharma is struggling to survive and remain independent. What approaches are Bayer Schering,
Takeda, and Lilly pursuing? What could be the unintended consequences?
Scope
- Biotech industry: Bankruptcy, venture capital investing, bailout, cash reserves, comparative effectiveness,
biosimilars, liquidation, job losses, white knights, IPOs, culling, registered direct offerings
(RDOs), private investment in public equity (PIPE), corporate venture funds, number of venture
deals 1995-2009.
- Pharmaceutical industry: Changing growth sources, mature markets, bioinvestment, biosimilars
regulatory pathway, NICE’s July 2009 rejection of Merck-Serono’s Erbitux (cetuximab), E7 countries,
top 25 pharma companies, top 20 pharma markets, midsize pharma, unintended consequences,
survival strategies, animal health businesses, specialty medicines, biologics, consumer health.
- Strategies and business models: A ranking of 11 survival strategies in play in the pharmaceutical
industry, cash-outs, FIPCOs, virtualization, hibernation, consolidation, reverse merger, emerging
markets, selectively integrated business model, codevelopment, co-commercialization, Big Pharma
collaboration, mega-mergers, joint ventures, takeovers, M&As, inlicensing, combined brand/generics
model, proof-of-concept trials, spin-offs, diversifi cation, divestments, evolve or die, geographic
expansion, alliances.
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