In general the top 10 pharmas need to do both. Others, such as Shire can in-license products. Some might claim that the likes of Glaxo (now GlaxoSmithKline) were initially successful not through R&D but being an excellent marketing machine. There are convincing arguments that Richard Sykes' policy of investing heavily in R&D didn't produce the necessary results but others will point to Merck, which has been successful in growing organically (i.e. without acquisitions). Even Merck, however, did this year pay $0.7bn for Rosetta a US biotech company and it is the feeling for many people that Biotechs will be providing the R&D for big pharmas in future years.Let me illustrate that pointPfizer has a market cap of $243 bnTop 100 biotechs pooled together have Mkt Cap of $241bnPhase III compounds for Pfizer? 14Phase III compounds for top 100 biotechs (pooled)? 96Pfizer Total drugs in development? 484Top100 bio total drugs in development? 552000 Sales Pfizer? $29.6 bn2000 Sales Top 100 Biotechs? $17.6 bnR&D Pfizer? $4.4 bnR&D Top 100 Biotech? $6.6 bnCash position Pfizer? $9.0bnCash position top 100 biotech? $31.7 bnbut...2000 Net Income Pfizer? $3.7 bn2000 Net Income Top 100 Biotech? $0.13 bnHeadroom for growth???Considering the immense marketing machines that top 10 Pharmas have it might not be a bad idea to take their pick from what biotechs churn out to plague holes in their pipeline. GSK have already changed their R&D set up making project managers compete for R&D funding internally, practically turning them into 'mini-biotechs' themselves. Don't forget, however, that a lot of the biotech products in development are already licensed out to Pharmas!Hope that helps
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