The four years of the alliance illustrated that the partnership was useful to both partners. Particularly, the alliance helped Bayer introduce new drug targets for thrombosis and urinary inconsistence thanks to work by Millennium. According to Löffler et al., the alliance is effective for both partners because it is based on the perfect interaction between the two companies (11). On the one hand, it is useful to Millennium because the company received funding from Bayer. Moreover, the alliance helped Millennium make meaningful steps towards becoming a pharmaceutical company. On the other hand, the alliance helped Bayer launch new drug targets. Secondly, the alliance helped Bayer increase its revenue through the new drug targets. However, the case study suggests that Millennium benefited from the alliance more than Bayer. According to Löffler et al., Bayer entered the alliance in the capacity of a minority joint venture (8). The only benefit from Bayer’s perspective was launching new drug targets. In contrast, Millennium gained several benefits from the alliance. For instance, the alliance allowed Millennium to expand its downstream pipeline of manufacturing products. Löffler et al. observe that Millennium was able to expand its downstream pipeline because of the access to Bayer’s products, which were already on the market (11). By 2002, Millennium closed its fifth merger to become a biopharmaceutical company with multiple products on the market. Effectively, Bayer helped strengthen Millennium, which in the next couple of years could well become one of Bayer’s strongest competitors. As the companies look into the future, Bayer should renegotiate the terms of the alliance to maintain its advantage over Millennium. The best way forward for Bayer is to try to acquire or merge with Millennium. Collaborating with Millennium as a separate company will work against Bayer in the end. The case study demonstrates that the alliance has favored Millennium more than it has Bayer. Accordingly, Bayer should consider merging with Millennium.
The Bayer-Millennium alliance, is a case study that illustrates how two companies with different competencies can collaborate to benefit each other. Bayer was struggling to develop new drug targets, which was having a negative influence on the company’s revenues. Accordingly, Bayer formed an alliance with Millennium, which had a technology platform that could significantly accelerate developing new drug targets using genomics. The success of the alliance with Millennium encouraged Bayer to form a collaborative partnership with CuraGen. The partnership with CuraGen helped Bayer reduce drug development costs, reduce time to market, and create safer drugs. On the other side of the Bayer- Millennium alliance, Millennium benefited more than Bayer. At the start of the alliance, Millennium was a mid-sized biotechnology firm. Through the revenue Millennium received from Bayer, access to Bayer’s technology, and mergers with five companies, Millennium grew to become a biopharmaceutical company in 2002. Millennium’s rapid growth during the four-year alliance suggests that Millennium will soon become one of Bayer’s strongest competitors in the pharmaceutical industry. Accordingly, Bayer should either acquire Millennium or merge with Millennium to create one entity with a strong strategic position that can rival Pfizer and GlaxoSmithKline.