Simon’s Blog

A couple of days, I wrote about my predictions for the return of the VC-backed drug discovery biotech technology platform company. Yesterday, there was another major acquisition of a small biotech company by a large pharmaceutical company. So, there are now several reasons why I’m expecting a flurry of VC activity in the next weeks and months; the drivers of interest being the acquisition of small drug discovery platform biotech companies by big pharma/biotech during 2006, for large sums of money:

• Cambridge Antibody Technology (CAT), a UK biotech company acquired by AstraZeneca for $1.3B - May 2006
• Avidia, a US biotech company acquired by Amgen for $290M - Sept 2006
• Domantis, a UK biotech company acquired by GSK for $450M Dec 2006

Interestingly, we’ve worked with two of these three - CAT and Avidia - so I can say with some confidence that both of those two companies have great drug discovery platform technologies. This means that these were certainly acquisitions that can be truly “value-creating” in the long-term (even ignoring the current therapeutic product pipelines the companies had at the time of acquisition).