Now you have that integration occurring, with Pfizer closing some research and development facilities and laying off some of the sales force.
You have to remember the core of the company is the product. To think about merging two big pharmaceutical companies you have to ask yourself, "Did you do something to improve the productivity of research and development?" That's the heart of it.
Once you have scale, it needs to be driven by product development. Often when companies become bigger, that stifles creativity.
IBD: So bigger is not necessarily better.
Bannister: No. And now you're seeing big pharma companies creating silos focused on specific therapeutic areas to try to enhance creativity, to get the scientists more engaged in what's going on.
I think it's important to create smaller groups within such a large company. Big companies become more bureaucratic. That's why you now see big pharma carving out these individual areas of focus on certain diseases. IBD: Biogen Idec says it's open to buyout offers. What if other big biotechs, like Amgen, follow suit?
Bannister: Pharma companies would be interested in Amgen. It's a great biotech company and has a decent pipeline.
Clearly pharma has the cash to do deals. But look at some of the prices recent deals have brought, like 10 times forward sales. That's what AstraZeneca paid for MedImmune. It's a pretty steep price.
We'll have to see if AstraZeneca can crank products out of the pipeline as a result of its acquisition of MedImmune. We won't know if they got their money's worth for a few years.