Oncolytics Biotech Inc ONCY

RE:RE:RE:RE:Big pharma is set to keep signing bigger deals in 2024

[Noteable]

Screening the market to identify under-served therapeutic areas with unmet treatment needs is an approach that guides big pharmaceutical companies in their focus as they search for new acquisitions.

Often this approach is one of buy and build around a key initial acquisition to create a platform where synergies in knowledge and sales channels can be exploited. 

While a few years ago small biotech companies were seen as competitors to the large pharmaceutical groups, but because of the impact that the patent cliff and loss of revenue from some of the largest revenue generators of the recent past decades, big pharma is increasingly regarding early-stage pharmaceutical development at smaller companies as a complement to their own efforts. 

Critically, they also view them an ‘option’ for a future acquisition if the strategic product fit and research results are positive.

As large corporates reshuffle their portfolios regularly, either as part of ongoing strategic reviews or as part of maturing segments, assets are opportunistically divested and acquired. A growing strategy is emerging around the acquisition of orphan assets as single agents or as part of larger platform portfolios, which reflects in part, ONCY's platform asset in pelareorep for the treatment of multiple cancers. And with a registration ready drug platform, ONCY is now a late-stage clinical development company commanding a significant acquisition valuation over early stage or small molecule companies.

As the value chain of pharmaceutical companies continues to evolve and becomes increasingly complex, their view of core strategic functions also evolves. One of the significant drivers to Big Pharma's acquisition strategy is the Inflation Reduction Act (IRA), which provides 13 years of market exclusivity to newly approved biological treatments versus 9 years for small molecules.