Mar 01

Biotech and pharmaceutical alliances deals making

Why is there an increase in alliances within the pharmaceutical and biotech industry

The process of biotech and pharmaceutical alliances or dealmaking covers a large variety of consensus and conventions between individuals, companies and organisations. Pharmaceutical alliances can target simple late-stage product acquisitions, such as deals related to development of clinical trials or marketing, but can also target more complex deals in drug discovery and development.

Pharmaceutical alliances has existed every since the beginnings of the pharma industry. However, the extent of biotech and pharmaceutical alliances have rapidly accelerated with the quick growth of biotech companies and the need of pharmaceutical companies to grow larger to enhance their pipelines in the last few decades. Why is there an increase in alliances within the biotech and pharmaceutical  industry?

Here are the most important factors that influence biotech and pharmaceutical alliances.

1) There has been a drastic increase in cost for the drug discovery and development (R&D) and its marketing over the last few years.

2) There is a low probability of success : 10 000 compounds will be investigated at early stages of drug discovery, of which only 5 compounds will enter a clinical trial, and only 1 will be reviewed by FDA, and may receive approval for its release on the market.

3) There is an increased interest from universities and research centers to commercialize their new findings or innovations.
4) The number of biotech and pharmaceutical companies is increasing, however those companies often lack resources to:

– develop a full drug discovery and dvelopment program;
– market the new drug or therapy at an international level.

5) Investors are demanding a proof for a sustained growth and want an endorsement or support of new technologies by experienced pharmaceutical companies.

6) Many drug patents are expired or will expire soon, therefore, for many biotech and pharmaceutical companies, there is a urgent need of new formulations and drug delivery formats.

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7) There is a bit deficit in big biotech and pharmaceutical pipelines, i.e. the number of promising drugs is low, and many large pharmaceutical companies now depend a lot on biotech and pharmaceutical alliances for up to 60% of their pipelines.

Not only the number biotech and pharmaceutical alliances is growing, but alliances are also changing. Indeed, biotech and pharmaceutical companies are often cold to the idea of sharing the right of a drug in development.  Hence, alliances are now often more complexed to allow the licensor to retain more rights and control over the new drug development.

For more information, visit http://www.clinical-trials-info.com/.

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