Deal Statistics Quarterly, Q2 2005
In this issue, we present another installment of our quarterly review of dealmaking-for April-June 2005. Our data comes from Windhover's Strategic Intelligence Systems, which covers deal activity within the pharmaceutical/biotechnology, medical device, and in vitro diagnostics industries.
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The Vicuron acquisition auction, won by Pfizer, starkly revealed the fact that the biggest Big Pharmas have now got a striking advantage in their ability to access new products. Not only do they have more cash than anyone else, they can spend it without hurting the "adjusted" profits they highlight to Wall Street. As importantly, investors don't punish them on the basis of the expected returns from these investments. Indeed, the market expects them to spend the money-for now.
Cephalon's acquisition of US rights to Alkermes' Vivitrex, a long-acting formulation of the alcohol abuse drug naltrexone, is a clear sign that mid-sized companies with marketed products can--thanks to their significant cash flows--contend with Big Pharma for important specialist products.
European private companies and VCs are faring no better than their US counterparts when it comes to IPOs so far in 2005. But a series of bad haircuts and poor aftermarket performances hasn't scared everybody off, yet.