The financial crisis may have a silver lining for Big Pharma. Licensing deals struck by drugmakers with smaller biotechs could really take off.

With credit tightening and the market values of some smaller companies taking a beating, the terms for Big Pharma may get a whole lot more attractive, the Boston Consulting Group says in a new report.

Although drugmakers have long looked to licensing to replenish depleted pipelines, the number of deals has fallen 18% a year since the start of 2006, the consultants say. The reason: deals got too expensive.

Big pharmaceutical companies flush with cash can drive hard bargains with biotech companies who lack other sources of funding.

“You will see some of the smaller biotechs and specialty pharmaceutical companies struggling to renew their credit facilities over the next six months or so, and that will drive a number of deals,” Alastair Flanagan, a senior partner in Boston Consulting Group’s health-care practice, told the Health Blog.

There have been a few examples of licensing deals at bargain-basement rates, such as Novartis’s recent agreement with Xoma, a specialist in therapeutic antibodies. Meanwhile, Japan’s Eisai agreed to buy TorreyPines Therapeutics’ Alzheimer’s disease research program for a reported $1.5 million.

Source: The Wall Street Journal

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