The UK pharma sector served up a flurry of acquisitions recently, as companies use the pre-results season lull to either bulk up their product portfolios or broaden the scope of their businesses. Both AstraZeneca (AZN) and BTG (BTG) went on the acquisition trail, though the relative size of the companies quickly ranked the takeovers in order of their operational importance.
The acquisition with the most significant effect was probably at BTG, not only for the size of the outlay, which at $380m (£253m) is a considerable commitment for a mid-sized company, but it also has important implications for the company's strategy. The acquisition of TheraSphere and EKOS, funded in part by a £106m share placing, continues to strengthen the emphasis of BTG's business on types of medicine that aren't directly related to pharmaceutical products. For example, TheraSphere is a specialist in treating liver cancer with microscopic drug-eluting glass beads and complements BTG's biocompatibles acquisition neatly, while EKOS has considerable expertise in vascular medicine and would make an ideal channel in which to sell BTG's Varisolve varicose veins product when it becomes commercially available sometime next year.
AstraZeneca's priorities in the takeover market are dictated much more by the state of its product pipeline. Chief executive Pascal Soriot has proved to be active in shoring up AstraZeneca's notoriously threadbare development pipeline. The latest acquisition is cardiovascular specialist Omthera for $443m. Astra has been looking to bulk up its cardiovascular offering and is the second such acquisition since it bought AlphaCore Pharma, a small early-stage US biotechnology company, in April.
Omthera has obvious crossover potential with Astra's existing cardiovascular portfolio, but the acquisition is also emblematic of the way the company offsets development risk. Instead of slugging its way through the whole research & development process, buying Omthera now means that Astra gains access to Epanova, a medicine derived from fish oil that is slated for regulatory scrutiny this year. The chances of success are probably even, but there are already fish oil-based medicines on the market, notably GSK's super strength Omega-3 product, Lovaza.
