In addition to licensing and other traditional partnering deals, large pharmaceutical companies are paying eye-watering prices for tiny biotech companies which have been starved of money by the reluctance of financial markets to invest in the area. "Pharma companies are desperate for new products," Simon Moroney, chief executive of Morpho-Sys, the German antibody company, tells the FT. "They are prepared to pay huge amounts of money for early-stage compounds."
Traditionally, big pharma would become interested in biotech companies only when their products were well into clinical trials but now they are willing to buy technology at an earlier and riskier stage, before it has been tested on patients. For the small companies, selling out is seen as cheaper or less risky than holding an IPO. "An IPO is very expensive and the valuation you get is not high enough," says Martin Mattingly, chief executive of Ambrx, a Californian protein engineering company.
