Weekly Policy Blog: CBSA Joins New Partnership to Promote Benefits of Pro-Innovation Mergers & Acquisitions
By: Colorado BioScience Association Date: 10/09/2023
CBSA has joined a new coalition to raise awareness of the fundamental role of pro-innovation mergers and acquisitions (M&A) in advancing the next generation of treatments and cures for patients. Partnership for the U.S. Life Science Ecosystem (PULSE) launched on October 4, 2023, with more than thirty leading organizations from across the life sciences dedicated to raising awareness about the unique life sciences ecosystem and the importance of M&A in leveraging efficiency and experience across companies of all sizes.
The PULSE Coalition
PULSE members are organizations that represent frontline researchers, employees, and leaders of diverse life sciences companies. The PULSE coalition will collectively highlight the importance of shared efficiencies and expertise that companies leverage across the development process through M&A to make sure patients receive lifesaving treatments as quickly as possible.
The Role of M&A in the Life Sciences
The U.S. is home to thousands of life sciences and biopharmaceutical companies, comprising one of the most diverse and highly competitive industries worldwide. Life sciences companies of all sizes engage in M&A to achieve broad, efficient allocation of resources and expertise that are essential to stay in operation and navigate the complex regulatory, reimbursement, and distribution systems within the biopharmaceutical market. Pro-innovation M&A offers an indispensable bridge that helps shepherd early discoveries into the lifesaving treatments and cures needed for patients.
M&A, as well as other collaborations, enables the U.S. life sciences ecosystem to bring together the resources, investment, and expertise needed to develop and deliver new treatments and cures for patients. PULSE is dedicated to raising awareness about the unique life sciences ecosystem and the importance of M&A in leveraging efficiency and experience across companies of all sizes.
A Uniquely Competitive Industry
The American life sciences industry is among the world’s most competitive, with hundreds of new companies starting every year with the hope of finding a better answer to treat a disease. There are more than 8,000 treatments and cures in development across dozens of therapeutic areas. Among those medicines in the development pipeline, three-quarters have the potential to be first-in-class treatments, representing entirely new approaches to treating a disease. Evidence demonstrates that life sciences M&A is associated with increased research and development (R&D) and innovation by enabling broad and efficient allocation of funding and other resources across the life sciences ecosystem.
Policymakers, regulators, and the courts have long recognized the unique aspects of the life sciences industry, including the differentiated and vital role that pro-innovation M&A plays within it. On average, it takes 10-15 years and costs $2.6 billion to develop and bring a new medicine to patients, including the cost of the many failures along the way. Only 12 percent of new molecular entities that enter clinical trials eventually receive U.S. Food and Drug Administration (FDA) approval.
Even when a medicine or treatment receives regulatory approval, the competition that exists – between innovative products already on the market, emerging new therapies in development, and eventually generic and biosimilar competition – all contribute to America’s life sciences ecosystem being one of the most competitive industries in the world.
Recently, the Federal Trade Commission (FTC) articulated a new approach to antitrust enforcement that runs counter to long-standing precedent that has guided pro-innovation M&A for decades. If continued, the FTC’s flawed approach to M&A review and enforcement would undermine the dynamic ecosystem responsible for many of the world’s most innovative and important treatments. Deterring pro-innovation M&A would obstruct the many complementary relationships across the life sciences ecosystem, stalling treatments and cures for patients while risking jobs, wages, and economic growth in every state.
The life sciences ecosystem is diverse and interdependent. Every part of the ecosystem—from scientists, early-stage companies, academics, NIH and other government researchers, and larger life sciences entities—depends on M&A to fuel innovation.
PULSE partners reflect the diversity and collaboration that makes the American life sciences ecosystem the most competitive and innovative in the world. PULSE partners are part of a network of life sciences innovators from across the country supporting a competitive U.S. life sciences ecosystem.
In a recent press release, Life Sciences Leaders, Advocates Launch New Partnership to Promote Benefits of Pro-Innovation Mergers & Acquisitions, PULSE members provide real-world insight into the economic importance and benefits of M&A within local communities and to broader growth and development:
“When you consider the various milestones where M&A is so vital to a medicine’s discovery, development and distribution, it becomes all the more imperative that policymakers recognize the importance and immediacy in protecting these pro-innovation partnerships,” Joan Koerber-Walker, President and CEO of AZBio, said. “In Arizona, we have multiple examples where two companies have come together. The combined firms were able to leverage increased operational efficiencies and reach more patients as they brought their health innovation to market. The positive impacts are measurable in job creation and economic growth. And, best of all, more patients here in Arizona and around the world, are reaping the benefits.”
“Colorado’s growing life sciences community, recently ranked 8th in the country by JLL, makes important contributions to the state’s economy,” said Elyse Blazevich, President & CEO of Colorado BioScience Association. “Mergers and acquisitions support our state’s health innovators working to bring breakthroughs from the lab bench to a patient’s bedside. We find that acquired companies often retain a foothold in our state because of our top talent and quality of life.”
On October 4, 2023, one of the anchor life sciences companies in Colorado, SomaLogic, announced a merger with Standard BioTools. SomaLogic is a Colorado success story and a longtime leader in our life sciences community. The company was originally spun out of University of Colorado Boulder (Venture Partners at CU Boulder). This merger establishes a leading platform of multi-omic technologies with the highest throughput and highest data quality to power clinical research insights. The merger opens the door to meaningful value creation and is expected to generate $80 million in annual cost synergies by 2026.
“The vast majority of life sciences companies are small businesses, and the ability to grow, innovate and consistently scale relies on M&A,” Karen Kerrigan, President and CEO of the Small Business & Entrepreneurship Council, said. “Policymakers and regulators should take great caution in adopting antitrust policies that pose a fundamental disruption to the very essence of partnership that brings patients the innovative and breakthrough medicines they need.”