With Patent Cliff Looming, 2 Potential Takeover Targets For Roche
George Ronan | Feb 27, 2014 07:48AM ET
A patent cliff is the decline in revenues a pharmaceutical company experiences when the patents on one or more of their protected compounds expires. The lack of patent protection opens up the market to generic alternatives, which generic drug manufacturers sell at a discount to the branded option. This reduced cost redirects revenues from the manufacturers (generally big pharma) that bore the cost of research and development.
During 2014, the patent cliff concept will currently has 23 programs in clinical development, a combination of its own pipeline and a number of strategic partnerships. Four of these programs are currently in Phase 3 clinical trials and nearing data readouts. The company expects these data readouts during the first half of 2014. In addition to its pipeline, Agenus also seeks value through expansion. Last week, the company announced the completion of its acquisition of 4-Antibody AG, a private European-based biopharmaceutical company.
h3 Conclusion/h3Over the next two years, the incumbent pharmaceutical companies will likely seek acquisition targets and licensing opportunities to offset potential patent related revenue losses. For Roche, a company that generates the majority of its revenues from oncology treatments, these acquisitions will likely include development stage cancer treatments. If they can prove the efficacy of their respective treatments, both Theralase and Agenus would offer Roche exposure to cutting edge cancer treatments over a range of disease instances.
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