Big pharmaceutical companies' hunger for new products will drive further large-scale acquisitions in the biotech sector, following a record year in 2007, according to a report on Tuesday.
Ernst & Young predicted in its annual global biotechnology survey that the convergence of biotech and pharma industries would continue unabated in 2008 and beyond.
"One or more mega acquisitions of mature biotechnology companies along the lines witnessed with MedImmune -- and nearly seen with Biogen Idec in 2007 -- is likely," the consultancy group said.
MedImmune was bought by AstraZeneca Plc for $15.6 billion last year. Biogen, which has a market value of nearly $19 billion, was also on the block but failed to sell.
The role of mega-deals in the biotech sector has been disputed. Some investors, such as billionaire activist Carl Icahn, believe they can unlock substantial value. But others say smaller deals make more sense for drugmakers.
In practice, the sector is likely to see a combination of both big and small deals.
More from Ben Hirschler at Reuters
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