British Biotech is taking a Beating
Despite a recent report heralding the ascendancy of the Welsh biotechnology industry, the majority of biotech companies in Britain are in danger of fading away according to a report in London's Financial Times. According to the Times; “Over the past year the sector has witnessed a string of high-profile drug failures, share prices have plunged and there have been almost no public listings. The sector is shrinking as private biotech companies are bought by cash-rich pharmaceutical companies, most of which are based abroad”.
“The quality of British science has never been in question. Commercial biotech’s perennial problem, say the pundits, is instead a lack of financing, management expertise and commercial savvy. “The UK has always labored under the yoke of not having enough venture capital around and not having the people prepared to take risks” said one analyst.” Nevertheless, the UK is currently responsible for more than one-third of the European Union’s total drug pipeline.
The British biotechnology industry isn’t alone. Consolidation of the US biotechnology industry has been quietly going on for the past 5-10 years. Many successful American companies have been acquired by major pharmaceutical companies. For example, MedImmune and Millennium Pharmaceuticals were recently purchased by Astra Zeneca and Takeda Pharmaceuticals respectively. That said, I don’t think that what is happening in the UK is unique to the British biotech industry. The bottom line is this; Biotech is a capital-intensive, briskly paced, risky business that is, at most, 35 years old. More companies than not are expected to fail. Pharma, on the other hand, is a conservative and experienced cash-rich industry that is over 100 years old. Therefore, it follows that pharma companies, when possible, will buy successful biotech companies to bolster their thinning pipelines to stabilize their stock prices.
In my opinion, the seminal underpinning and essence of the biotech industry is to harness scientific originality to create innovative l technologies and products. That said, I believe that the biotechnology industry has finally become an integral part of the life sciences ecological food chain (think of biotech as a producer and pharma as a consumer). I can’t think of many biotechnologies company executives (with the exception of Biogen) that wouldn’t consider acquisition or merger with a major pharmaceutical company as an ideal exit strategy for their stakeholders!
Until next time….
Good Luck and Good Job Hunting!!!!!!
