EyesOn Optimizing BD Strategy

Business Development as a Strategic Lever: Looking at how Biopharma Companies are tapping into a mix of BD Activities - Acquisitions, Licensing, and Partnerships -

to Reposition for Growth

Executive Highlights

• Bayer, Angelini, Lilly, Madrigal, Pfizer, and Astellas are pursuing different types of business development transactions, but all are responding to the same challenge: sustaining growth in increasingly competitive and capital-intensive markets.

• Acquisitions, licensing agreements, and partnerships are creatively being used to replace future revenue, access innovation, expand geographically, reduce development risk, and improve capital efficiency.

• Recent transactions span ophthalmology, rare disease, oncology, vaccines, RNA therapeutics, and metabolic disease, highlighting the breadth of business development activity across the sector.

• The common thread is not the structure of the deal—it is the strategic objective behind it.

• Business development is once again in the limelight as companies work to manage their portfolio and anticipate needs for long-term competitive success.

Introduction: Revisiting the Multi-Lever Strategy Framework

In recent PharmaTell posts, we explored how successful biopharma companies increasingly manage multiple strategic levers simultaneously. Portfolio focus, capital allocation, manufacturing footprint, clinical differentiation, market access, geographic expansion, and pricing strategy all influence long-term performance.

Business development is an integral component of corporate strategy and is being used with increased frequency. Companies are tapping into external innovation to accelerate growth, mitigate risk, replace future revenue streams, and gain access to capabilities that would take years to develop internally.

Recent activities from Bayer, Angelini, Lilly, Madrigal, Pfizer, and Astellas illustrate how business development is being deployed to solve very different strategic challenges. While the deal structures vary considerably, the strategic objectives are remarkably consistent.

Replacing Future Revenue Before It Disappears

Bayer Acquires Perfuse Therapeutics to Reinforce its Ophthalmology Future

One of the clearest examples of proactive portfolio management comes from Bayer's acquisition of Perfuse Therapeutics for $300 million upfront and up to $2.15 billion in development and commercial milestones.

At first glance, the transaction appears to be a straightforward ophthalmology pipeline acquisition. In reality, it represents a strategic effort to strengthen one of Bayer's most important franchises before competitive pressures significantly impact performance.

Bayer's ophthalmology business remains heavily dependent on Eylea, the anti-VEGF therapy developed with Regeneron. Eylea generated approximately $3.7 billion in sales for Bayer during 2025, making it one of the company's largest revenue contributors.

However, the franchise faces increasing challenges:

• Competition from Roche's Vabysmo

• Expansion of Regeneron's Eylea HD formulation

• Emerging long-acting ophthalmology therapies

• New mechanisms under development for diabetic eye disease and glaucoma

• Future pricing and reimbursement pressure

Against this backdrop, Perfuse's lead candidate, PER-001, offers something different.

Unlike anti-VEGF therapies that focus primarily on abnormal blood vessel growth, PER-001 is an intravitreal implant delivering an endothelin receptor antagonist. Elevated endothelin-1 levels have been implicated in several retinal and optic nerve diseases, including diabetic retinopathy, glaucoma, and age-related macular degeneration.

The rationale is compelling:

• Improve retinal blood flow

• Reduce ischemic injury

• Preserve retinal ganglion cells

• Potentially address disease progression through a different pathway than VEGF inhibition

• 
  

Phase 2 studies have demonstrated encouraging safety and efficacy signals in diabetic retinopathy and glaucoma populations.

From a strategic perspective, Bayer is not simply acquiring a clinical-stage asset.

It is purchasing an option on the future of its ophthalmology franchise.

The transaction reflects an increasingly common theme across the industry: companies are investing years before replacement growth becomes an immediate necessity. Waiting until a franchise begins to decline is often too late.

Acquiring Commercial Scale and Market Access

Angelini Pharma Uses Acquisition to Accelerate Rare Disease Expansion

Angelini Pharma's acquisition of Catalyst Pharmaceuticals for approximately $4.1 billion demonstrates another important strategic objective: acquiring commercial infrastructure and market access capabilities. Catalyst generated approximately $589 million in revenue during 2025, representing annual growth of roughly 20%. Key products include:

Firdapse (amifampridine)

Indication:

• Lambert-Eaton Myasthenic Syndrome (LEMS)

2025 Revenue:

• Approximately $358 million

Growth:

• 18% year-over-year

Agamree (vamorolone)

Indication:

• Duchenne Muscular Dystrophy

2025 Revenue:

• Approximately $117 million

Fycompa (perampanel)

Indication:

• Epilepsy

2025 Revenue:

• Approximately $113 million

While the products are attractive, the acquisition thesis extends beyond individual assets.

Catalyst provides:

• Established U.S. commercial infrastructure

• Specialty rare disease expertise

• Relationships with key treatment centers

• Rare disease reimbursement capabilities

• Immediate cash generation

Rare disease markets continue to attract strategic interest because they possess several favorable characteristics:

• Premium pricing

• High unmet need

• Concentrated patient populations

• Specialized physician networks

• Relatively limited competition

For Angelini, building these capabilities organically could require years of investment and execution risk. Acquiring Catalyst immediately creates a scalable U.S. platform that can support future launches and business development activities.

The transaction highlights how acquisitions can function as a market access lever rather than simply a product acquisition.

Building Future Growth Engines Before They Are Needed

Lilly Expands Beyond Obesity Through Infectious Disease Acquisitions

Perhaps the most strategically interesting recent business development activity comes from Eli Lilly. Fresh off the extraordinary success of Mounjaro and Zepbound, Lilly could easily focus exclusively on obesity, diabetes, oncology, and immunology.

Instead, the company has made a series of aggressive investments in infectious disease.

Recent acquisitions include:

Curevo

Transaction Value:

• Up to $1.5 billion

Lead Program:

• Amezosvatein

Target:

• Shingles prevention

Competitive Target:

• GSK's blockbuster Shingrix vaccine

LimmaTech Biologics

Transaction Value:

• Up to $780 million

Lead Programs:

• Vaccines targeting Shigella and invasive bacterial infections

Vaccine Company

Transaction Value:

• Up to $1.55 billion

Focus:

• Epstein-Barr Virus (EBV)

• Flavivirus vaccine programs

Combined, these transactions represent approximately $3.8 billion in potential investment. The obvious question is:Why vaccines?

The answer lies in long-term portfolio strategy.

Lilly's obesity franchise is expected to generate tens of billions of dollars annually.

The company appears to be using current cash flows to establish future growth platforms.

This strategy mirrors historical approaches taken by:

• Roche during oncology expansion

• AstraZeneca's diversification into rare disease

• Johnson & Johnson's portfolio balancing strategy

The acquisitions also provide diversification benefits.

Vaccines typically:

• Face different competitive dynamics

• Have longer product lifecycles

• Generate recurring demand

• Provide exposure to public health procurement channels

To supplement incremental opportunities within obesity, Lilly appears to be positioning itself for the next decade by working on portfolio diversification before diversification becomes necessary.

Accessing Innovation Without Full Ownership

Not every strategic challenge requires an acquisition. Increasingly, companies are using licensing agreements and partnerships to gain access to innovation while preserving capital flexibility.

Madrigal and Arrowhead: Building Combination Leadership in MASH

Madrigal's licensing agreement with Arrowhead illustrates this approach. Madrigal currently markets Rezdiffra (resmetirom), the first FDA-approved therapy for MASH (Metabolic Dysfunction-Associated Steatohepatitis). However, many industry observers believe MASH will ultimately become a combination therapy market.

To strengthen its position, Madrigal licensed Arrowhead's RNA interference candidate ARO-PNPLA3. The program targets PNPLA3, a gene strongly associated with liver fat accumulation and fibrosis progression.

Key findings from early studies include:

• Approximately 46% reduction in liver fat

• Significant reductions in PNPLA3 protein expression

• Potential applicability in genetically defined patient populations

Strategically, Madrigal is positioning itself for a future where multiple mechanisms may be required to achieve optimal outcomes and rather than acquiring Arrowhead outright, Madrigal gains access to the asset while maintaining capital flexibility.

The objective is not ownership. The objective is strategic positioning.

Pfizer and Innovent: Accessing China's Innovation Ecosystem

Pfizer's partnership with Innovent Biologics reflects another major trend in business development.

The agreement includes:

• $650 million upfront payment

• Potential milestones approaching $50 billion

The collaboration focuses on:

• Antibody-drug conjugates (ADCs)

• Multispecific antibodies

• Next-generation oncology assets

The significance extends beyond the individual programs. China has become one of the most important sources of external innovation in the pharmaceutical industry.

Over the past five years, Chinese biotech companies have increasingly produced:

• Globally competitive ADCs

• Novel bispecific antibodies

• Cell therapies

• Immunology programs

Major pharmaceutical companies including Bristol Myers Squibb, AstraZeneca, Novartis, and Merck have all increased engagement with Chinese innovators.

For Pfizer, the Innovent deal provides:

• Access to a rapidly expanding innovation ecosystem

• Reduced early-stage discovery risk

• Potentially faster development timelines

• Exposure to multiple platform technologies

The strategic lever here is innovation access without full acquisition risk.

Managing the Patent Cliff

Astellas Prepares for Life After Xtandi with BD + Financial Initiatives

Few challenges are as important to pharmaceutical executives as patent cliffs.

Astellas provides a particularly instructive example. The company's prostate cancer therapy Xtandi has been a major commercial success, generating approximately $13 billion globally. However, eventual loss of exclusivity creates pressure to identify future growth drivers. Astellas has adopted a strategy to build around around several growth assets:

Padcev

• Urothelial cancer

Veozah

• Vasomotor symptoms associated with menopause

Vyloy

• Gastric cancer

Izervay

• Geographic atrophy

Xospata

• Acute myeloid leukemia

At the same time, management has implemented significant operational efficiency initiatives. Recent actions include:

• Approximately ¥11 billion in SG&A savings already achieved

• Target of roughly $1.3 billion in cumulative savings by 2030

• Portfolio prioritization efforts

• Focused licensing transactions

The strategy appears designed to balance:

• Growth investment

• Risk management

• Capital efficiency

Rather than betting on a single transformative acquisition, Astellas is building multiple potential growth pillars while maintaining financial flexibility.

BD remains one of the primary strategic levers available to management teams seeking to balance growth, innovation, risk, and capital efficiency.

The companies highlighted here are using different tactics and execution, but they share a common philosophy: Use a mix of internal and external innovation to maintain or grow their competitive advantage by:

• Accelerating timelines

• Reducing development risk

• Preserving capital

• Expanding into new markets

• Improving competitive positioning

Additional Reading

• PharmaTell Studio

• PharmaTell Studio

• PharmaTell Studio

• PharmaTell Studio

• McKinsey & Co

• BioPharmaDive