The 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?
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.
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