Biotech Sales Are Big Businesses in San Diego
Life sciences companies in San Diego County are a driving force in the local economy, and the region has continued to see strong growth and interest from investors and buyers. For those looking to sell, it's never a bad time to start planning a strategy to make sure your business stands out from the crowd.
Biotech Exits Are Slow and Steady Wins
Big pharma is increasingly looking at biotech purchases as a means of staying competitive. It's often cheaper than doing their own research and development, and drug companies are always looking for new ideas. Acquisitions take much of the risk out of bringing new products to market, and with a huge number of biotech start-ups to choose from, pharmaceutical companies have picked up an addiction to shopping. It's the most common exit among businesses in life sciences, and it serves exit-oriented biotech owners well to cater to pharma corps.
Much of the movement in this space flies under the radar, but on closer examination small deals can turn out to be massive paydays years down the road. Owners often sell early and for what looks like a modest price, but they, along with early investors, keep hold of their shares until the new ownership converts the deal into a blockbuster.
Diligence Pays Off in San Diego Life Sciences
It's prudent to start putting together a sales plan and exit strategy long before inking a deal. While it's always a good idea to be ready to make a move when opportunity strikes, a sales strategy in life sciences is particularly important, helping business owners identify potential pitfalls and deal breakers and avoid being looked over by hungry corporations with fat wallets.
Most biotech deals that fall apart are due to a lack of studies that prove their product. No matter how good a business looks on paper, and even if its research and development methodology is sound, if potential buyers can't say with confidence that a product will make it to market, they're not likely to invest in a dream. However, major players are sometimes hungry enough to make purchases without taking the time to ensure a successful transition.
In the case of Celgene's post-acquisition friction with Receptos, a little tension is probably worth the $7.2 billion windfall for the latter's former owners, but incidents like it will cause buyers to consider their decisions more carefully going forward.
San Diego is still among the best places in the world to sell a biotech company. Life sciences make up a massive part of the STEM landscape in San Diego County, with a much larger share of biotech businesses versus tech start-ups compared to similarly sized and educated cities in the United States. This is partly due to a history of success stories, with bio businesses performing well for decades.
Signs of Life Show Biotech in Good Health
Biotech is trending upward nationally, with big deals going down across the United States at accelerated rates. Recent mergers and acquisitions have focused on patent grabs by large pharmaceutical companies, as is to be expected, but smaller mergers give biotech brands a leg up in a sometimes-fickle market. Innovative companies are pooling their resources to accomplish more, so there are very different players in the game, which gives options to sellers.
San Diego's Vical Incorporated recently inked a deal with Brickel Biotech, under which Brickel will merge with an unnamed subsidiary of Vical. The deal shows that San Diego isn't just an incubator for biotech start-ups, but a major player in its own right.
Selling a Biotech Business in San Diego
LINK San Diego has business brokers that specialize in selling companies of all sizes, at any stage, and we can get interested eyes looking at your biotech company with our industry-leading business listings. Contact our office today at 858-452-3000 or email at infosd@linkbusiness.com.