A spate of biotechnology mergers and acquisitions in 1992reflected the ever-present needs of companies on both sides oftheir respective bargaining tables for cash and technology.
The large, well-established conglomerates found the means toestablish or strengthen their presence in biotechnology, and themore mature biotech companies found a source of cash to helpthem get to market. And when both parties brought technologyto the table, the whole often exceeded the sum of the parts.
For instance, the merger of Genetics Institute Inc. (GI) ofCambridge, Mass., and American Home Products (NYSE:AHP) ofNew York ended up "increasing GI's chances to build asuccessful pharmaceutical business," according to Garen Bolen,GI's (NASDAQ:GENIZ) executive vice president.
Not only did it "provide a significant amount of financialstrength via the cash infusion," but it provided the opportunityfor an exchange of complementary technology, he said. "AHPhas strength in traditional drug development, plus someopportunities that involve development of biologicals as aresult of partnerships with other companies," Bolen said.
John Stafford, AHP's chief executive officer, added that hiscompany's "investment in GI represents a quantum leaptoward our goal of becoming a premier company in the field ofbiotechnology."
And Seattle-based Immunex Corp.'s (NASDAQ:IMNX) mergerwith American Cyanamid (NYSE:ACY) of Wayne, N.J., in theform of a cash contribution and the Lederle Laboratories'oncology business, was a tactic to "create a profitable companybased on synergies between Lederle and Immunex, a largeportfolio of established products, a rich product pipeline andthe financial strength to develop it," said Stephen Duzan,Immunex's chief executive officer.
It also created the second-largest oncology company in NorthAmerica, according to George Sella Jr., Cyanamid chief executiveofficer. Cyanamid's North American oncology business waspredicted to have 1992 sales of $115 million, and the companywas valued at $250 million.
The marriage of Applied Biosystems Inc. (ABI) of Foster City,Calif., and Perkin-Elmer (NYSE:PKN) of Norwalk, Conn.,combined the considerable technical and instrumentationresources of each company, plus complementary internationalmarketing networks.
Perkin-Elmer brought its polymerase chain reaction (PCR)technology and its alliance with Hoffmann-La Roche, while ABI(NASDAQ:ABIO) contributed its DNA and protein analysis andsynthesis technology. The new entity, the Applied BiosystemsDivision of Perkin-Elmer, will use its collective might --patented technologies, intellectual property and products -- toexplore new markets: forensics, paternity testing, animalhusbandry, agriculture, and environmental and personalidentification testing.
There were 19 mergers and acquisitions in 1992 that exceeded$10 million in value. Together, they add up to an impressive$2.85 billion worth of faith in technology and in biotechnology.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.