Sergio Garcia, co-chairman of Fenwick & West's Life Sciences Group was recently quoted in an Oakland Tribune article, "Pharmaceutical giants view biotech players as key to the future."
The pharmaceutical and biotech industries are facing a metamorphosis of sorts leading to greater interdependency than the two have ever experienced. Biotech companies are relying on pharma giants for cash infusions, while pharmaceutical firms are jockeying for new products as their patents expire.
According to Garcia, "The two sides that were once separate really have to put aside how they operated and looked at each other in the past and really work as a team…Because if they don't, both sides will be in trouble."
A trend of Bay Area Biotech companies forgoing IPOs for partnerships, alliances and acquisitions by pharmaceutical firms is on the rise. Some examples include:
- Roche's $2.1 billion majority stake in Genentech;
- Novartis AG's stake in Emeryville-based Chiron before acquiring the company in 2005;
- PDL BioPharma of Fremont licensing technology to Roche, Wyeth Pharmaceuticals, and
- Deals inked between Pfizer and Vicuron, Shire and Transkaryotic, and OSI and Eyetech.
"Right now, the bottom line is every pharmaceutical company wants to be involved in and have access to the innovative drugs and technologies that biotech companies have to offer," Garcia said. "Now they understand this is where they want to be."
Article is by Oakland Tribune business writer, David Morrill.