"Here's the key to the front door, and here's a billion or two to do the research. Thanks for saving us some money."
That's basically the sentiment from an announcement made by drugmaker sanofi-aventis
Much of the research will actually remain in-house; it just won't be Sanofi's house anymore. The drugmaker is selling two research facilities to Covance for approximately $25 million.
The deal mirrors a similar agreement that Covance and Eli Lilly
These deals are really a win-win for both sides. As pharmaceutical companies expand, there's bound to be bloat -- yeah, I'm looking at you Pfizer
While it sounds great for the bottom line, investors do have to worry about whether this virtual drug development is the most ideal setup for pharma in the long run. The people left at the company are like the quarterback, just distributing the ball from one player to the next. Will the skills of reading the situation and making adjustments during development get lost?
In the end, the obvious good outweighs the potential bad, especially since big pharma's track record for drug development hasn't exactly been superb over the past few years.
Stocks on the rebound? Buy this company that will surely benefit.
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