Consumers may be saving more and spending less, but big pharma is on a shopping spree. And I'm not talking about the really big deals including Roche buying Genentech, Pfizer buying Wyeth and Merck buying Schering-Plough. I'm talking about the two deals that have been done in less than a week between major drug companies and baby biotechs specializing in oncology. It's what one analyst recently coined the growing "P & A" trend in biopharma. It's not so much about mergers and acquisitions (M & A) as it is about partnerships and acquisitions.
First, Johnson & Johnson ponied up nearly a billion bucks for Cougar Biotech. And it did it before seeing late-stage test results to determine if CGRB's prostate cancer drug extends lives, which is the new gold standard in oncology treatments. That might have raised a few eyebrows. But it's a relatively small gamble for a company as big as JNJ. And one source tells me JNJ may have quickly pulled the trigger because several other companies were courting Cougar. As that person said, "There's a lot of hand-wringing and crying over spilled milk going on." In other words, you snooze, you lose.
Then, today Sanofi-Aventis is hooking up with Exelixisin a deal that could be worth more than a billion dollars over time on two cancer drugs in early-stage clinical trials.