Biologic and pharmaceutical companies, along with their financial advisors or venture capital partners, have used mergers and acquisitions over the years to create value to keep their leading positions in a changing market. The era of pharmaceutical companies relying on blockbusters for their growth is over as more and more of these drugs have faced patent expiration, with no indication that new medicinal discoveries will emerge to take their place.
The cost and time commitment to develop new drugs has increased significantly over the last few decades. A variety of factors come into play, but on average, in terms of total expenditures, it has taken from $3 to $5 billion and up to 15 years to bring a new drug to market. Even after all that time and money, with challenging regulatory requirements and other factors, the odds of a new compound making it from the lab to the pharmacy are miniscule. The chance for a new drug to make it to market is a sobering 1 in 5000.