Dealmaking Roundtable

With recovery from the 2009 recession now underway, good deals are back on the drawing board. The challenge will be to paint over legacy risks and fill the canvas with the right mix of assets at the best price for long term shareholder gains
May 01, 2010


Pictured, from left: Wael Fayad, Forest Labs; Jeff Brennan, Targacept; Mary Tanner, Peter J. Solomon Co.; Ben Bonifant, Campbell Alliance; Dennis Purcell, Aisling Capital; Barbara Ryan, DeutscheBank; Doug Giordano, Pfizer; Alex Scott, Eisai
Business developers and the investors and analysts who specialize in the "art of the deal" are pharma's window on the future—the canaries in the coal mine who can sniff both danger and opportunity from the faintest dry breeze of incentive. Every year, Pharm Exec assembles a diverse "brain trust' of experts who meet to identify trends in the M&A and licensing fields and make predictions of the industry's health as a driver of next-stage innovations in medicine. On February 1, we convened our latest panel of eight—drawn from a mix of big and "stealth" pharma, biotechs, and the investment banks—to calculate damage from the recent market decline and lay out new milestones for progress in this year's apparent path to recovery.

What follows is a summary of the group's discussion, covering a wide range of strategic questions: Does 2010 mark the end of the financing drought and a return to robust deal making? Will the caution and sobriety induced by the Great Recession lead to stronger and more lasting collaborations? Is licensing an adequate substitute for Big Pharma's newfound skepticism about the contributions from in-house R&D? How will the 2009 bumper crop of megamergers affect the number and price tags for deals in key therapeutic areas like oncology, primary care, and specialty? And what are the new markers for success in biotech's effort to secure fresh capital?

Our panel did find common cause around a single truth: The search for real value—value that can be differentiated against the competition—is irresistible, in good times and bad. And although the circumstances of each deal are unique, the driver that will bring people back to the table in 2010 is still a simple one: Big Pharma is looking to snag marketable new products at minimal risk, while small biotech has to raise money. Let the games begin.

—William Looney, Editor-in-Chief