Here’s Why Orphan Drugs Will Remain Attractive M&A Targets

Friday, May 29, 2015

Source: The Wall Street Journal

Amid the mergers-and-acquisitions boom in the pharmaceutical industry, one trend is increasingly discernable – orphan drugs are a desirable target. In fact, half of the recent acquisitions among drug makers and biotechs involved an orphan drug, according to Moody’s Investor Service. Of 18 deals announced since August, nine involved an orphan drug, which is used to treat a rare disease.

Why? Drug makers can charge high prices without much push back from payers; patients often require life-time treatment, which means ongoing sales; there are relatively high hurdles for creating competitive medicines, and regulators give drug makers extra time to exclusively market these medicines as a reward for serving what are often unmet medical needs.

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