Monday, December 10, 2001
Although both MedImmune Inc. and Millennium Pharmaceuticals Inc. have attained top-tier status in the biotech space, each has reached its elite status from markedly different roots. And through separate billion-dollar-plus purchases of two one-product companies last week, MEDI and MLNM furthered their very different strategies for achieving greater mass as biotech companies.
MEDI, founded in 1988, was an early biologics company focused on polyclonal antibodies that has developed virtually no internal discovery capability but prefers to build its pipeline through acquisition of projects from preclinical to late-stage clinical and marketed products. Thus the $1.5 billion acquisition of Aviron gains a product with the potential to power MEDI's growth over the next few years as its flagship Synagis product matures, buying time to commercialize earlier projects in its pipeline.
By contrast, MLNM, which was among the first genomics companies when it was founded in 1993, has focused on building a discovery capability on an industrial scale, which it has leveraged through cash-rich partnerships with pharma partners. Looking ahead, its $2 billion purchase of Cor Therapeutics Inc. provides MLNM with a revenue-generating product and commercial infrastructure that help it integrate downstream and give it a product focus.
At first blush, the fit between MEDI and AVIR (Mountain View, Calif.) is more apparent than the deal between MLNM and CORR (South San Francisco, Calif.). But at the end of the day, both transactions illustrate a reality for biotech and pharma companies alike: if a company can't grow enough products internally in the timeframe that investors want, it will have to buy them. Conversely, one-product stories - no matter how good the product - will have a short independent lifespan.
MEDI: Revitalizing the S-curve
MEDI hopes that AVIR's FluMist intranasal influenza vaccine will fuel its growth as its signature product, Synagis pavilizumab, matures. The humanized monoclonal antibody is marketed to treat respiratory infections