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LONDON—Biotechnology acquisitions in the U.S. totaled $28.5 billion last year, driven by Takeda Pharmaceutical Co. and Eli Lilly & Co. purchases made to bolster their product offerings, according to a recent report by Ernst & Young Global Ltd.

"The attention right now may be on the financial crisis which certainly had an impact on biotech investment, but 2008 was still a near-record year for mergers and acquisitions," Glen Giovannetti, head of Ernst & Young's biotech group, told Bloomberg News.

Large drugmakers are investing in biotechnology to bolster revenue as patents on top products expire, said the London-based consulting firm. European biotechnology deals added up to $5 billion more last year, led by Novartis AG's acquisition of Speedel Holding AG for $932 million. In the largest deal of the year, Osaka-based Takeda bought Millennium Pharmaceuticals of Cambridge, Massachusetts, for $8.8 billion. In the second-biggest deal of the year, Life Technologies Corp., formerly known as Invitrogen Corp., agreed to buy Applied Biosystems Group for $6.7 billion on June 12. Eli Lilly & Co. agreed to purchase New York-based ImClone Systems Inc. for $6.5 billion on Oct. 6, gaining the cancer drug Erbitux as well as several experimental tumor treatments.

Acquisitions of U.S. biotech companies reached a record $33 billion in 2007, led mostly by London-based AstraZeneca plc's $15.6 billion purchase of flu vaccine maker MedImmune Inc., Ernst & Young said. Excluding that unusually high transaction, 2008 had the highest deal total ever, the firm said.

U.S. and European biotechnology companies raised $16 billion in capital, a 46 percent decline from a year earlier, according to the Ernst & Young report. Funding from initial public offerings plunged 95 percent to $116 million from $2.3 billion as the global recession intensified. Biotech venture financing fell only 19 percent to $6 billion after a record high in 2007.

Revenue of publicly traded biotechnology companies grew 12 percent to $89.7 billion last year, according to the Ernst & Young report. The global industry's net losses shrank to $1.4 billion from $3 billion a year earlier.

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