Pharma and biotech nuptial rumors abound — but who will be first to take the plunge?

by Anne Law, October 19th, 2007, 5:11 am

Merger Mania in the pharmaceutical and biotechnology industries has gotten to the point that I expect new juicy gossip (along with hard facts, of course) when I check my trusty online news sources each morning. There’s likely to be either a new biotech company up for grabs or fresh speculation on which big pharmaceutical company will buy it.

Pfizer seems to be at the top of the heap for speculative glances lately when it comes to the latter. Last month rumors had the company joining forces with Sanofi-Aventis to create a pharma behemoth, but October’s rumors center on the company acquiring a booming biotech to plump up its sorely lacking pipeline. Possible Pfizer purchases, according to the media and analysts, include Amgen, Genzyme, ImClone, and the readily available PDL BioPharma. Some speculate that Pfizer could (or should) buy into the biotech field in smaller chunks, however.

The trigger for much of this speculation was Biogen Idec’s announcement last week that it would put itself up for sale. That Pfizer reportedly looked into buying Biogen a couple of years ago adds fuel to the fire for matchmakers looking to pair up the two companies. Other potential buyers that have put stars in the eyes of market speculators include big-time pharmas Sanofi-Aventis, Novartis, and GlaxoSmithKline, or maybe even the big J&J. Of course we can’t forget activist investor Carl Icahn, whose unsolicited bid for the company prompted Biogen Idec to put itself on the auction block in the first place.

For examples of Pharma/Biotech marriages that at least have the potential for happily-ever-after, see AstraZeneca’s recent purchase of MedImmune and Novartis’ acquisition of Chiron. Why are these big time pharmas willing to spend big bucks on biotech? Most of them are looking at patent expirations on some of their top selling brands, and in addition to boosting R&D efforts on their own new formulations, are looking at acquisitions as a way to boost future sales.

Biotech is a key target for companies like Pfizer that have fallen behind in the rat-race to create the ultimate in gene-based treatments and vaccines for ailments like cancer and HIV. Unfortunately for all companies involved, profit is never assured. To twist an old Robert Burns poem — the best-laid plans of pharmas and biotechs often go awry, and leave them with failed trials and FDA rejections where success was promised.