Chemistry Firms Still Second Fiddle in Biology-Chemistry Mergers

With a scarcity of well-trained chemists, and exponentially increasing numbers of genomics-generated targets contributing to an already bulging lead identification/optimization bottleneck, medicinal chemistry capabilities are at a premium. Nonetheless, when it comes to market valuations, biology companies still come out on top. And a series of recent deals proves the point: Oxford Asymmetry International PLC selling out to Evotec OAI[See Deal]; Vertex Pharmaceuticals Inc. acquiring Aurora Biosciences Corp. [See Deal] and, most recently, Celera Genomics Group 's (an Applera Corp. unit) acquisition of Axys Pharmaceuticals Inc.[See Deal], and Lexicon Genetics Inc. 's purchase of Coelacanth Corp. [See Deal].

Most of these deals reflect the mutual desires of the companies involved to move towards a more product-oriented business model. Without proprietary targets of their own, chemistry-based firms are severely...