There is a recent article in Genetic Engineering & Biotechnology News discussing large life science tool companies and how recent growth (and by “recent” I mean the past half decade or so) of these large companies can be largely ascribed to acquisition. David Green, the president of Harvard Bioscience, was quoted as saying that “The average organic growth in the life science instrumentation industry, with the exception of sequencing-based businesses, remains a modest 3–6%.” I can only presume he’s speaking about public companies, which are generally much larger than the average company and therefore more constrained in terms of their potential growth.

This, I argue, is not surprising at all. Larger companies are simply better suited to buy than develop. Given that various granting agencies (for example, the NIH) pump billions upon billions of dollars a year into life science research, wouldn’t it be expected that the more common option for large companies would be to eat up the newly formed companies that are so often a product of that investment?

Now this is not the case in all fields. The technology that moves forward some sectors of the life science tools market are far less frequently products of grant-funded research. In these sectors, R&D spending is necessary and there will often be fewer start-ups to acquire. Companies in these sectors may be limited to the number of viable acquisitions possible or reasonable and therefore must find ways to grow organically.

Regardless of the sector, this is good news for small life science companies founded on solid, promising IP that are looking to get bought out. It seems there are plenty of behemoths with deep pockets who are willing to throw plenty of money around for the right opportunity. However, for those who don’t have that killer technology, whose product portfolio doesn’t fit excellently into that of a much larger company, or who simply wish to remain independent, you have no option but to grow organically. That, my friends, is a topic for another day.