Sizzling market heats up biotech buyout fever
Source: Fierce Biotech
By: John Carroll
Biotech buyouts are all the rage these days. Following fast on the heels of yesterday's news that Gloucester is being bought out by Celgene, Merrimack Pharmaceuticals announced its deal to buy South San Francisco-based Hermes Biosciences. And Biogen Idec continues to press development partner Facet Biotech to accept its offer.
The Boston Globe, reporting from the epicenter of the deal game, has officially branded it all as a sign of ‘buyout fever,' with 90 biotech M&A deals so far this year, compared with the 84 tracked by Thomson Reuters for all of 2008. The buyouts are being struck as more money is flowing into the drug development business. Biotech stocks are now tracking back north after dipping in October, and four developers registered IPOs last month. And it's all far from finished.
"You're seeing more investment in, and acquisition of, the small biotech companies,'' Robert Coughlin, president of the Massachusetts Biotechnology Council, tells the Globe. "For us, this is all about bringing a therapeutic to market. And if some consolidation is required to do that, that's not such a bad thing at all. You're going to be seeing more activity, lots more.''
In the Hermes Biosciences deal, Merrimack CEO Robert Mulroy said he was primarily interested in the biotech's drug delivery technology. Hermes has developed new nanotechnology that can deliver a drug payload directly to targeted cells, a boon for a developer like Merrimack, which has a pipeline of experimental cancer therapies.
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