I am not sure if this applies here, but Regulatory Capture is a certain way to block the small players from growing. I understand that drugs are a special case, so I do not know if that applies there.

Also, the fact that a product fails post-acquisition is precisely what happens a lot in regular business too. They can be seen as a threat to other fiefdoms in the behemoth, or they lose their autonomy. Doesn't always mean the product or idea was flawed beyond repair.