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Prime Acquisition Targets

Stat reports that experts are predicting a coming surge of mergers and acquisitions in the biotech space, and an analysis by the publication revealed that early-stage startups are likely to be the primary target.

According to Stat, "Now, just as in the mid-2010s, major pharmaceutical companies are sitting on piles of cash and eyeing the expiration of key patent protections for lucrative products." Meanwhile, startups also have more reasons in the current environment to agree to an acquisition, just as they did 15 to 20 years ago.

Stat analyzed the timing of more than 250 acquisitions in biotech from 2000 to 2021. Almost a quarter of the companies acquired in the most recent surge, between 2013 and 2018, had yet to begin a phase II trial. In other years, however, similar early-stage companies comprised just 10 percent of acquisitions.

"Part of it is basic human emotion and behavior," Scott DeWire, head of business development and licensing at Boehringer Ingelheim, told Stat. "When more deals are made, risk tolerance is going to open and you're going to make deals you wouldn't make in the time period when you can be much more selective."