Pfizer/Angiosyn: Building Biotechs for Device-style Early M&A

While the press surrounding Pfizer Inc. 's acquisition of privately held Angiosyn Inc. in mid-January suggested a $527 million blockbuster deal for the tiny California biotech, the immediate financial reality behind the biobucks headlines was slightly more mundane [See Deal].

Angiosyn was formed in May 2003 by the Scripps Research Institute's Paul Schimmel, PhD, with backing from venture firm Alta Partners to develop a novel angiostatic agent for ophthalmologic diseases; its buyout is essentially a licensing deal. But given the lack of Angiosyn infrastructure and human resources, and that Pfizer is acquiring the small company's only asset, there won't be other ongoing operations. The biotech's investors received only a small double-digit up-front payment, but that was enough, according to Alta managing director Dan Janney, for the VC to secure a "significant multiple" on its original sub-$5 million investment