In a sign that large pharma companies may try cooperating instead of competing as generic drug companies come for their business, AstraZeneca (AZN) and Bristol-Myers (BMY) will jointly market two new diabetes drugs.
The move saves both companies a good deal of effort in overlapping sales effort. BMY tends to focus its marketing efforts on physician specialists while AstraZeneca has stength in the general practice doctor field.
The deal also requires AZN to share development costs of the two drugs as the get closer to market. The potential weakness of the alliance is that it will cost AstraZeneca some extra cake, whether the drugs are approved for commercial sale or not.
The deal is no news at this point, but what it signals may be. Detente among the Big Pharma companies who may now see the advantage to jointly bear sales and development costs on drugs. The generic guys want all of their business and as more drugs come "off patent" revenue will flow in their direction.
So, Big Pharma joins hands.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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