Big Pharma Finds New Pipeline Source: Each Other

As Big Pharma's pipeline crunch continues, so does competition for late-stage licensing opportunities. The charts below, in which we've plotted Big Pharma in-licensing deal volume and average up-front payments by phase, illustrate this pointedly: as the opportunities are picked off, absolute numbers of new late clinical deals have declined from 2002 to 2003, a trend that will probably continue through 2004. Meanwhile, early clinical deals, which had fallen as drug firms fell over themselves looking for late-stage deals, jumped in volume from 2002 to 2003: as Pharma squeezed the balloon from one side, the other side necessarily expanded. Meanwhile, licensing payments have steeply risen on average in market-stage deals and continue to grow gradually in clinical-phase deals.

A notable trend behind these rising values is a spate of Big Pharma cross-licensing deals. Collaborations between Big Pharmas certainly...