Small U.S. Biotechs, Foreign Firms Join In Investment 'Mating Dance'

With Wall Street investment rapidly drying up for small United States biotechnology companies and large foreign drug firms eying lucrative overseas markets for American biotech products, partnerships between the two may be the wave of the future, biotech executives and industry analysts say. OBSERVER: Formatech president and AAPS official Benjamin Isaacs notes benefits of the increase in alliances. These international alliances generally include a combination of R&D collaborations; product ma

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Benjamin Isaacs OBSERVER: Formatech president and AAPS official Benjamin Isaacs notes benefits of the increase in alliances.

"There are two dynamics working toward one another," says G. Steven Burrill, managing partner at Burrill and Craves, a private merchant bank in San Francisco. "You have the need by large pharmaceutical companies for innovation and the need by small biotech firms to access capital to achieve sustainability. Both sides are now aggressively participating in this mating dance," which, he says, has been going on in earnest for the past two years.

But if such partnerships become the new business model for drug development, industry observers caution, it may not bode well for company researchers. As large drug firms--foreign or domestic--invest more and more in smaller biotechs rather than shore up their own research departments, it could mean fewer jobs for scientists in corporate R&D. At the same time, some small biotechs--investment money notwithstanding--remain at ...

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