Acquisitions In The Life Sciences Start-Up Space: A Principal-Agent Problem In The Making

Earlier this month, Bloom Burton & Co. hosted the 2017 Bloom Burton Life Sciences Investor Conference. The conference brings together early stage life sciences companies with professional advisors in the industry for two days of talks given by the companies on what they are trying to accomplish and how they have been progressing. Over the course of the conference, there is a familiar refrain among companies in the drug, processes or technology development space. Frequently, we hear these companies talking about acquiring other intellectual property (be it drugs, processes or technology) for the purposes of "stabilizing their pipeline." The logic behind this is that since any individual drug, process or technology has a snowball's chance of succeeding, bringing together a number of these intellectual properties increases the company's chance of survival.