Reliant's business model -- building a new company to sell the primary care products that looked too puny for Big Pharma -- posed management and financing challenges that almost killed the company. It's turned around, thanks to new management and a product in a hot area-lipids. But what's really got its investors excited: the opportunities posed by late-stage primary-care failures at Big Pharmas, who are now looking for market-proven products. And those Big Pharmas can help pay the acquisition cost by dismantling the costly infrastructure created to prove the product's value in the first place.

It's been a long and largely unpleasant summer for Alkermes--a major product delay and, thanks to the subsequent stock drop, the cancellation of its acquisition of Reliant and the chance to turn itself into a commercial organization. Now it's cut back on spending--laying off 23% of its workers and, in the process, creating a pipeline gap for the company as it pushes forward with late-stage Vivitrex and slows down on preclinical and early clinical work and giving up the flexibility "to be expansive," says the company's CEO.

By in-licensing Lidocaine, a needle-free anesthetic ready for phase III testing from PowderJect and obtaining rights to PowderJect's needle-free drug delivery platform, the one-year-old pain management company AlgoRx has transformed itself overnight from a six-person shop with a pre-IND candidate to a drug-development company. Now it faces the challenges of late stage development and creating a pipeline with its injection technology platform. For a 15% stake in AlgoRx, PowderJect is glad to have finally divested its drug delivery business so it can focus on vaccines, an area which, through a series of acquisitions, is moving the company into the black.