 Spectrum --
October 2004
 In This Issue...
Since the signing of the first
strategic alliance between a pharmaceutical company and a biotechnology
company, such alliances have evolved into essential tools with which companies
exploit and share key technologies and products. In 2002 and 2003, the pace of
alliance deal making began to decelerate, although average deal size continued
to increase. The proliferation of small, early-stage deals signed in the late
1990s and early 2000s is giving way to larger deals involving significant
equity investments. The continual evolution of the life sciences industry will
have a significant effect on the future of strategic alliances. This report
presents a top-level strategic review of the pharmaceutical licensing arena and
examines how companies use alliances to deliver value to shareholders.
Specifically, it looks at the evolution of the pharmaceutical industry and the
increasing strategic importance of alliances. We review recent trends in
pharmaceutical alliances, including the emergence of multilayered licensing,
multistage licensing, biotech-biotech deals, midstage agreements, and specialty
pharma agreements. Ten strategic alliances are profiled in order to highlight
specific landmark agreements, and we analyze deal valuation from both financial
and strategic perspectives. The final section of the report presents
predictions for the future of strategic alliances.
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