Are biotech and big pharma the perfect match?

Abstract

Purpose The biotechnology (biotech) and pharmaceutical (pharma) industries have a lot of similarities, particularly regarding their mission to provide lifesaving and life-improving drugs. However, there are some key distinctions between the two industries. It is these differences, however, that make that ideal partners and have resulted in a wave of mergers and acquisitions between the two industries. Design/methodology/approach This research paper offers an insider-outsider approach to the biotechnology and pharmaceutical industries. Based on an extensive review of the industries it offers key insights into the reasons for the multiple partnerships that have developed. Findings The findings demonstrate that the different stages of maturity of the business models of biotech and big pharma make them ideal partners. Both rely on the advantages of the other in their development, hence the wave on M&As between the two industries. Originality/value This article clearly shows how two firms or industries at different stages of maturity can be mutually beneficial. This has led to many acquisitions and mergers.