Smaller biotechnology companies maneuvering through drug-development regulations are reportedly focusing their efforts on licensing products in development or selling their businesses to large pharmaceutical companies rather than pursuing an initial public offering (IPO). “There basically isn’t an IPO market,” J. Scott Tarrant of the product development company RRD International told a news source. “It’s pretty much dried up. So the days of a company raising a lot of cash through an IPO . . . and taking products all the way through to market is not standard business practice anymore.”
As larger companies trim research and development spending, smaller companies evidently see the opportunity to develop their own technology to attract pharmaceutical giants looking to absorb the technology and move to market quickly. “What I think is becoming more and more the trend is these [biotech] companies not investing in a lot of infrastructure, trying to build value in their products as quickly as possible, so they can attract a deal with pharma,” Tarrant said. See The Washington Post, February 28, 2011.