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Genmab/GSK: An Impressive Display of Biotech's Increased Leverage

Cash-rich and product-poor pharmaceutical firms playing catch-up in large molecules have turned 2006 into a bumper year for dealmaking. Even so, Genmab AS's monster December deal with GSK for worldwide rights to the Phase III anti-CD20 antibody ofatumumab (HuMax-CD20), which includes a whopping $459 million in up-front cash and equity payments, seemed to catch analysts by surprise, beating even optimistic expectations

Christopher Morrison

Cash-rich and product-poor pharmaceutical firms playing catch-up in large molecules have turned 2006 into a bumper year for dealmaking. Not only are acquisition prices soaring—witness Merck & Co. Inc.’s $1.1 billion takeover of Sirna Therapeutics Inc. , for example [See Deal]—but licensing continues to be extremely lucrative: biotech companies simply have more leverage than ever before in negotiations, thanks to Big Pharma’s ongoing and acute pipeline dilemma

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