Market Background.

Over recent years we have seen the major pharmaceutical companies grow by mergers and acquisitions to supplement any organic growth within their organisations as a result of the fruits of their research and development and increased revenues from new products.

The overall result of this consolidation is that a smaller number of companies now have a significant share of the global market. As well as bringing some organisational synergies these larger organisations are better able to bear the risk consequent upon the significant proportion of turnover that is invested in research and development.

These larger multinational corporations have tended to change their focus towards medical areas that may be expected to generate the significant financial returns that would be required by shareholders. This does not tend to leave resources available for areas considered to be non-strategic to the organisation.

Following a merger it is not uncommon for the new corporation to re-focus it's portfolio by divesting of non-strategic assets.

In terms of research and development within the pharmaceutical industry there are many exciting initiatives with the promise of breakthroughs in biotechnology, gene therapy and natural therapies. In addition, we are also seeing advances in the ways of delivering these medications to the patient in order to enhance therapeutic value.

Although most research is undertaken by major pharmaceutical companies there are now probably more small R&D companies than there have ever been. Although many of these partner with major corporations to achieve funding others, particularly those operating in niche markets often need to make other arrangements.

Beacon Pharmaceuticals Strategy.

In the context of the market opportunities Beacon has a two pronged strategy:-

1. The acquisition of the non-strategic products from established pharmaceutical companies.
2. Partnering with organisations to successfully commercialise pharmaceuticals in the UK.