Graffinity/MyoContract: Two Problems, One Solution

By merging with Swiss product development group MyoContract, Germany's Graffinity addresses its two key issues at once: a lack of products, and poor prospects for a viable listing in its home market. Europe's industry needs more such deals, but making them happen isn't easy.

Heidelberg-based Graffinity Pharmaceuticals AG is the latest German biotech to use M&A to morph from a platform into a product company. Until a few weeks ago, Graffinity was a typical German biotech. Founded in 1998 at the height of the country's government-funded BioRegio program, the company was built on the back of a series of clever technologies designed to help others discover and develop drugs.

Since then, the platform technology model has fallen out of favor. Shifting priorities at Big Pharma customers, the commoditization of technology and the painful market correction have led to an...

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