The Acquisitions Continue: Roche buys Piramed
Roche is increasing its stakes in biotechnology research by buying 100% of Piramed, a UK-based biotech company. This small, privately-owned company is the rising star on developing therapies targeting P13 kinase (P13-K) pathway which plays “an important role in disease progression and in resistance to chemotherapeutics in cancer cells.” [1]
With the acquisition, Roche also acquires Piramed`s two major P13-K projects on oncology and inflammatory medicine. This solidifies the collaboration between Piramed and Genentech (partly owned by Roche) on these research programs.
This is not the first time that big pharma takes over small but promising biotech firms. Pfizer bought Angiosyn in 2005. Merck acquired Sirna in 2006. Sanofi Aventis joined forces with Regeneron last year.
According to analysts [2], such mergers and acquitions are not necessary favorable in the long run. Small companies are saved from financial troubles at the expense of the larger firms which tend to suffer from slow growth and postmerger integration problems – problems which can divert cash from R&D and further slow down the pipeline.
References:
1. Roche Media News, 15 April 2005
2. Danzon et al. Mergers and acquisitions in the pharmaceutical and biotech industries. NBER Working Paper No. 10536, May 2004
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