12:00 AM
Apr 14, 2003
 |  BioCentury  |  Strategy

M&A adds fuel to the fire

Big Spenders

M&A adds fuel to the fire

Many biotechs making the shift from toolkit models or early stage research to more fully integrated product development companies are doing so with the help of mergers and acquisitions. But while M&A adds pieces of the value chain, it also can add significant costs. Thus, it bears repeating that acquirers need to move quickly to retain the assets they need and divest those they don't.

Edward Lanphier, president and CEO of zinc finger protein company Sangamo BioSciences Inc. (SGMO, Richmond, Calif.), paid close attention to the spending meter following the company's acquisition of Gendaq Inc. in the U.K. for $25 million in stock (see BioCentury, June 4, 2001). SGMO wanted Gendaq for its gene regulation technology, which used engineered zinc finger DNA binding proteins and was complementary to SGMO's approach. SGMO also added Gendaq's $6 million in cash to its $63.9 million in cash it had as of March 31, 2001.

Prior to the acquisition, Gendaq had about 20 employees and was burning $3.5-$4 million a...

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