Drug Delivery's Consolidationist Argument

Recent dealmaking among drug delivery firms indicates that some companies, at least, see a value to offering a breadth of technology pharmaceutical clients.

Drug delivery is less a single segment of the drug industry then a collection of technological niches each of which shares certain business assumptions. Emisphere Technologies Inc. , Alkermes Inc. and DepoTech Corp. wrestle with completely different technological problems while they face precisely the same strategic difficulties—drug firms skeptical of their scientific capabilities and simultaneously doubtful that delivery technology is anywhere near as important as the underlying drug to be delivered.

The situation, to some degree, argues for consolidation: the more technological solutions a drug delivery player can offer, the greater...

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