Exit arbitrage

With everybody and their little brother looking to in-license late-stage or marketed products, there aren't enough drugs in the universe to support all the specialty pharma startups of the last few years. Xcel Pharmaceuticals Inc. is the second such company to be acquired this year, and there are likely to be more of these deals, as companies find it increasingly hard to license good products at reasonable prices.

Paradoxically, this seller's market for products makes it more attractive to these companies to put themselves on the block, especially given the hammering of valuations in the IPO market...