Big Pharma companies--GlaxoSmithKline ($GSK) included--have been looking for ways to move "beyond the pill" to gain a technological leg up on their rivals. And now, the British drugmaker is reportedly weighing a move that could help it do just that.
The pharma giant and Qualcomm ($QCOM) are in discussions over forming a joint venture that could potentially be worth up to $1 billion, the Financial Times says. Glaxo has reportedly hired lawyers to help negotiate terms of the venture with the California company, though talks are only in the early stages.
It wouldn't be GSK's first foray into medical technology partnerships. In December, the company teamed up with Wisconsin's Propeller Health to create a custom sensor for Glaxo's Ellipta inhaler--to be used in clinical trials of asthma and COPD patients--that would collect data and send it directly to GSK researchers.
Nor would it be Qualcomm's first time joining hands with a Big Pharma company. Earlier this month, Novartis ($NVS) announced a collaboration with Qualcomm Life to develop the next generation of its Breezhaler inhaler, used with each of the meds in the Swiss drugmaker's COPD portfolio. And shortly after, the companies said they'd be joining forces to start an investment firm geared toward "beyond the pill" technologies. Qualcomm is also working with drugmakers such as Roche ($RHHBY) on technology that helps collect and analyze clinical trial data.
And that could just be the beginning, according to PwC, which predicted in a recent report that drugmakers would increasingly look to the tech world for deals. 2016 will be the year of "merger mania," it forecast, with pharma companies searching for products and services that can boost their pipelines and portfolios.
But if pharma doesn't jump on the tech bandwagon, they could end up watching it pass them by, Novartis CEO Joe Jimenez warned at the JP Morgan Healthcare Conference. Competition in the pharma space is heating up, and with the digitization of healthcare, tech companies are "coming in from a different angle."
"It's going to be an area where we have to watch leverage and pay real attention," he said.
- read the FT story (sub. req.)
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