- As an alternative to developing new drugs through in-house research, pharmaceutical companies can obtain rights to new drugs developed by competitors through licensing or acquiring the drugs, or, in the case of smaller rivals, purchasing the rivals themselves.
- In recent years, many pharmaceutical companies have shied away from acquiring firms with drugs already on the market, or close to approval. Though such acquisitions involve little scientific or regulatory risk, they are expensive.
- Instead, many companies are opting to buy firms with drug candidates still in the early stages of testing, most of which will not make it through to market approval.
- Their rationale for this shift is twofold. First, they believe companies with early-stage drug candidates currently represent better value for money. Second, they can draw upon their familiarity with regulatory requirements to move early-stage drugs through clinical trials more efficiently than their smaller rivals.
- Japanese pharmaceutical giant Takeda is pioneering a new strategy in which it buys a minority stake in small companies with promising early-stage research. The drug maker recently signed about 200 deals with firms to fund their R&D programs in exchange for exclusive commercialization rights to any successful drug candidates.
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