Big pharma companies such as Pfizer, are expected to repatriate up to about $100 billion of foreign profits and re-invest them domestically, in an effort to churn out new products and replace products with expiring patents. Instead of being channeled to R&D, however, these funds are expected to be used for forging partnerships between the pharmaceutical and the biotechnology industry by way of mergers and acquisitions or external parterships.

Pharmaceutical companies are finding greater value in investing in biotechnology industry, which has proven itself better at advancing compounds than the pharmaceutical industry.

Mark Edwards, managing director of biotech alliance consulting firm Recombinant Capital, cites a good example of how big pharma firms can re-invest their foreign profits and take advantage of the 5.25% tax rate (instead of 35%):

"If you have one-time money, maybe what you want to do is really try to do something that is fundamentally going to change and improve your pipeline prospects akin to what Roche did with Genentech, which is clearly the best investment of all time," he said. "They didn't buy them out and they didn't go product-by-product. They became the first, longest-lasting bio-buddy that's been out there."

Read the full article from the SF Business Times.