Sandeep Kulkarni shares a framework from his chairman, Clay Siegall: a biotech can fail, get acquired after short-term success, get acquired after long-term success, or achieve rare 'escape velocity' to stay independent. This pragmatic view frames acquisition not as a lesser option but as a primary successful outcome for most.

The company's long-term plan is to handle drug development through to a successful New Drug Application (NDA) filing, then partner with a larger pharmaceutical company for marketing and sales. By deliberately avoiding the need to build a commercial sales force, they maintain focus on their core competency: drug development and clinical execution.

A successful acquisition strategy goes beyond the highest bid. It involves 'thinking like the molecule'—evaluating which buyer has the specific expertise, capabilities, and cultural alignment to best steward the asset's development. This reframes M&A from a financial transaction to a decision about the asset's future.

Zevra accelerated its transition to a commercial-stage company by acquiring Acer Therapeutics. This strategic move provided a foundational commercial team, specialty pharmacy contracts, and patient advocacy relationships, de-risking their upcoming drug launch by avoiding the distraction of building it all from scratch.

The CEO of NervGen explicitly states his goal is to commercialize their spinal cord injury drug independently, not to position the company for an acquisition. This long-term, mission-driven focus on getting a drug to market shapes strategic decisions and contrasts with a common build-to-sell mentality in biotech.

The old assumption that small biotechs struggle with commercialization ("short the launch") is fading. Acquirers now target companies like Verona and Intracellular that have already built successful sales operations. This de-risks the acquisition by proving the drug's market viability before the deal, signaling a maturation of the biotech sector.

Ainsworth believes a responsible biotech entrepreneur envisions the end goal—acquisition or IPO—from day one. At RetroSense, this meant constantly engaging with potential acquirers like Allergan to understand their needs and generate the specific data required to become an attractive M&A target.

For a biotech with an established commercial infrastructure, the most efficient growth strategy is to in-license late-stage or already-approved products. This leverages the existing sales force and operational teams to sell new products without adding significant overhead, maximizing operational efficiency and revenue.

M&A is often framed as a win, but it can be detrimental to patients. The acquisition of an aggressive, fast-moving biotech by a large pharma company can lead to slowed development timelines and more conservative regulatory strategies, ultimately delaying access to life-saving treatments.