Pharma partnering dollars continue to decline, Burrill & Co reports

The recent $3.4 billion partnering agreement announced in July between US pharma company Bristol-Myers Squibb (NYSE: BNY) and Anglo-Swedish drug major AstraZeneca (LSE: AZN) to share Amylin profits (The Pharma Letter July 2) points to a troubling trend in partnering deals for new drugs, diagnostics, and tools in development, notes Burrill & Co, a USA-based global financial services firm focused on the life sciences. B-MS also reached agreement to acquire Amylin for $5.3 billion.

Once a reliable source of funding for development activities, biotech companies are facing increasing competition for partnering dollars at a time when there is a shrinking pool of spending, says Burrill.

This year, partnering deals for therapeutics, diagnostics and tools companies during the first seven months totaled $18.9 billion, below the $22.7 billion for the same period a year ago. The decline continues a multiyear slide for partnering activity since at least 2009. Were partnering activity to continue at its current pace, it would total $32.3 billion this year, compared to $52.8 billion in 2009.