Mirum views the retreat of large pharmaceutical companies from the rare disease space as a strategic opportunity. This creates a less competitive environment for acquisitions, allowing Mirum to acquire assets that are often overlooked by larger players and serve patient populations others leave behind.

Contrary to seeking fully de-risked assets, pharmaceutical companies often prefer acquiring companies with some remaining clinical risk. This strategy allows them to leverage unique insights on early data to acquire assets at a better valuation, creating an opportunity for outsized returns before the value is obvious to others.

Basilea commercializes its products through third-party partners in nearly 80 countries, rather than employing its own sales force. This lean model allows revenues from new country launches to grow without a corresponding increase in SG&A costs, directly boosting profitability and de-risking future patent expiries.

Contrary to the belief that pharma can acquire any company, their options are highly constrained. Deals depend on finding targets that are willing sellers at the right time and valuation. The final choice is often "who you're able to buy," not just "who you want to buy," after navigating internal consensus.

While known for late-stage acquisitions, Mirum strategically uses smaller deals for early-stage assets to expand its capabilities. The Anthoran Therapeutics deal serves as a model: a low upfront payment with a back-ended structure allows Mirum to enter early-phase development—a new area for the company—while managing financial risk.

As large pharmaceutical companies shift focus to acquiring clinically validated assets, a gap has emerged in early-stage development. Smaller and mid-sized pharmas, unable to compete on price for late-stage assets, are now incentivized to take on more risk and partner earlier, driving innovation.

Mid-size pharma companies like Bausch Health can be more nimble than larger rivals by forgoing an internal research organization. This model allows them to focus on mid-to-late-stage development and acquisitions, pivoting capital quickly toward external assets with the highest scientific innovation and unmet need.

Lyora Therapeutics' model is built on acquiring promising, pre-clinically validated programs that larger companies shelved due to strategic shifts. This "asset-driven" approach allows a new company to rapidly build a pipeline without the cost and time of early-stage discovery, capitalizing on the sunk R&D costs of former owners.

Large pharma companies increasingly rely on smaller biotechs for early-stage, high-risk innovation. Startups operate with higher risk tolerance and faster decision-making. Once a drug shows promise, the larger company, with its vast resources and expertise in running large-scale trials, steps in to license or acquire it for scaling.