A flurry of major pharmaceutical company mergers and
acquisitions got plenty of attention this spring. Pfizer's (PFE)
acquisition of Wyeth, Merck's (MRK) purchase of Schering-Plough and
Genentech's (DNA) deal with Roche all made headlines for their
potential to help the resulting entities reduce costs and add new,
promising drugs to company pipelines.
But a recent string of quieter agreements that signal
collaboration on research and development-as opposed to
takeovers-point the way to the real future of the industry.
Collaborate to Innovate
Merck and AstraZeneca (AZN) combined two of their leading
pipeline products to develop an innovative cancer therapy,
GlaxoSmithKline (GSK) and Concert Pharmaceuticals pooled pipeline
assets in part to distribute risk, and Pfizer and GSK combined
their HIV pipelines and marketed products into a joint venture to
increase their chances of success.
These arrangements represent new, promising ways for the
industry to make its innovation machine run more efficiently. And
they stand in contrast to long-held R&D strategies that focused
on out-spending and out-innovating the competition. Drugmakers
pursued drug discovery and development on their own, bearing all
the risk and reaping all the rewards. But that model is proving
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