European biotech merger
Pharmaceutical companies, seeking to cut costs and find new medicines as patents expire, are merging at a record pace this year, making the $430 billion global drug industry the most active acquisition market behind banking.
That's according to Bloomberg story ("UCB's Celltech Purchase Underscores Record Pace of Drug Mergers, " 5/19/2004. There have been over $96 billion in drug and biotech mergers so far this year.
And the abovementioned merger between Belgian UCB and Britain's Celltech added a major $2.71 deal to the honor roll. The merger will form Europe's second largest biotech firm (Danish Novo Nordisk is first) and the world's #5.
UCB has developed allergy drugs, while Celltech has tended to specialize in cough-and-cold products. As with many European mergers, Celltech gains a marketing presence in the US and in Asia to expand its sales. UCB gains a very potential new blockbuster drug, currently called CDP870, which may have major implications in treating arthritis and gastric problems.
Biotech companies are becoming more desirable targets for the largest pharmaceutical oligopolies. Biotech firms develop drugs and treatments based on living organisms like bacteria, as opposed to the more traditional approach of chemical research at pharmaceutical companies. But increasingly, the line is getting blurred. Biotech companies tend to license their products to the bigger pharma companies. For example, UCB's Zyrtec allergy medicine is sold by Pfizer in the US.
