The bar for growth in the pharmaceutical and biotechnology industries has never been higher. With large and small companies alike showing gaps in pipelines, the competition for innovative products is intense, giving rise to an unprecedented diversity of partnering strategies and an equally unprecedented convergence of small-molecule drugs and biologics in company portfolios. Licensings are shaping up as the year's big deal.
But we also saw something new: drug companies pursuing diversity in novel technology. AstraZeneca bought Cambridge Antibody Technologies for $1.3 billion, making a significant commitment to monoclonal-antibody research, principally in inflammatory disorders. Merck agreed to pay $1.1 billion for Sirna Therapeutics, advancing its leadership position in RNA-interference technology. And Pfizer signed two headline deals: a $230 million purchase of PowderMed's DNA-based vaccines and a $500 million acquisition of Rinat Neuroscience in order to access early research in Alzheimer's and late-stage compounds for acute and chronic pain.
What we are seeing now, as Big Pharma delves into new technologies, delivery mechanisms, and therapeutic areas, looks like a return of sorts to innovation and diversification—but implemented in a more targeted, tactical manner. Nothing illustrates this better than recent deals in the action-packed central nervous system (CNS), oncology, and immunology markets.
Acquisitions and, especially, licensing deals are a tricky balancing act between, on the one hand, the needs of the marketplace as defined by holes in the pipelines at larger companies and, on the other, the promising products available from smaller companies. The financial status of each player, in turn, drives the terms by which the final deal is inked.