This month I was at a conference in Australia where one of the speakers felt that Australian companies being acquired by foreign or larger biotechnology companies was considered a threat. This is not an unusual response. There is always a natural ‘nationalism’ attached to an industrial sector. The car manufacturing industry, for example, is notorious from that perspective. When the UK car company Rover was sold to German BMW in the 1990s, there was a huge concern. In the end, BMW ditched Rover but kept the Mini, which is manufactured in Oxford close to our Headquarters in the Oxford Science Park. The success of the new Mini in the hands of BMW has boosted car manufacturing in Oxford to levels never anticipated 10 years ago.
In the UK biotech sector, there was a time when most people thought the same as my Australian colleague. There have been a number of acquisitions of biotech companies in the UK – and even in the Oxford Science Park a number of biotechnology companies have been acquired. Has this been negative for the pharmaceutical sector? I believe not.
Has the acquisition of biotechs been negative for the pharmaceutical sector? I believe not. First, it can only be seen to be a mark of success. Second, as the biotech sector matures, we expect to see a consolidation of our industry. Third, an acquisition does not necessarily mean that the acquired company disappears. Fourth, although post acquisition the company may shed its senior staff, these individuals often go off to found other biotechs, or join maturing biotechs.
First, companies wanting to acquire your organisation can only be seen to be a mark of your success. No one will want to buy an unsuccessful company, or one with little or no potential. It is, therefore, a by-product of success that companies will be bought.
Second, as the biotech sector matures, we expect to see a consolidation of our industry.
Third, an acquisition does not necessarily mean that the acquired company disappears. Often it means that its future is more assured as the new shareholders integrate the organisation into their operations.
Fourth, one concern is that post acquisition the company may shed its senior staff. Although this may seem dreadful, it often leads to those individuals then going off to found other local emerging biotechs, or to join other local maturing biotechs.
Are there any negatives in biotech companies being acquired? Well, yes, if the organisations are closed down completely in the local area but, on balance, it can only be a good thing for the industry.
Fintan Walton Chief Executive Officer PharmaVentures Ltd