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Is big pharma GSK eyeing its collaborators as potential acquisition targets?

Posted on 28 May 2012

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Glaxo, a big pharma company may find its next acquisition target in one of its partnering companies just like the U.K. drugmaker found the last two.

Glaxo has stakes in more than 10 publicly-traded companies, including DiaDexus, which develops diagnostics for detecting heart attack and stroke risk, according to data compiled by Bloomberg. The London-based company also has stakes in an undisclosed number of closely held businesses.

Glaxo this year has agreed to buy the 80 percent share of Cellzome it didn’t own, made a hostile bid for Human Genome Sciences, and increased its stake in Theravance .Glaxo had existing relationships with all three companies. Boosting revenue and profit growth by looking to smaller rivals with promising products or technologies is an industry-wide trend as large companies face generic competition.

“This is one of the smartest things that can be done with M&A strategy,” said Gbola Amusa, a health-care analyst at UBS AG. “As innovation-based M&A is sometimes a market for lemons, a buyer is typically at an information disadvantage to a seller. When there is a collaboration, however, there’s the potential to have the same information or more than the target.” Amusa said he sees Glaxo continuing with this strategy.

Read the full article at Bloomberg (link no longer available)



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