M&A trends in Pharma

Summary

Introduction

M&As have been the preferred growth strategy by a majority of Pharma companies. Although mega-mergers certainly create economies of scale and boost pipelines, the long-term effects may not be as favorable as desired. Current trends show the mega-mergers of the past are now a long gone strategy, as now companies are seeking to buy smaller companies for a smaller fee.

Scope

• Overview of the main trends driving M&A activity
• Analysis of key transactions in the past and the current state of the new company
• Case study analysis of recent M&A deals for each key trend

Highlights

Monoclonal antibodies have been a driving force of M&A activity within the biotech sector. Monoclonal antibodies make biotechs a very alluring target as they are predicted to have strong growth, and are not subject to generic erosion in the immediate future. Such is their pulling power that they have commanded high deal values and premiums.

The only country which has seen an increase in M&A activity is Japan. Aided by the weak dollar, Japanese firms are keen to enter the lucrative US market. In just over six months there have been four major buy-outs by Japanese companies.

Due to fierce competition and saturation in the US, coupled with a strengthening Indian market, India's generics companies have become more acquirers than targets, either buying directly in the US or indirectly by acquiring a less costly European firm.

Reasons to Purchase

• Identify the key trends driving M&A activity
• Understand the strategic motivations behind major deals
• Gain insight as to whether these trends are likely to continue in the future

Contents

• Chapter 1 Executive Summary
  • Scope Of The Report
  • Key Findings
  • Key Definitions
  • Methodology
• Chapter 2 Introduction To M&as In Pharma
  • An End To The Era Of The Mega-Mergers?
  • An End To The Era Of The Mega-Mergers?
  • Astrazeneca - From Mid-Cap To A Leading Pharma Company
  • Setbacks In The R&d Pipeline Drive An Acquisition Spree
  • Pfizer: Bigger Is Not Necessarily Better
  • What Happened To Pfizer After The Mergers?
  • Glaxosmithkline (Gsk): R&d Restructuring Post-Merger
  • Glaxosmithkline Restructured Its R&d In An Effort To Drive Productivity
  • New Trends: The Post-Mega Merger Era
  • Drivers And Resistors Of M&as
  • Drivers Of M&a In Pharma
  • The Number Of New Drugs Entering Clinical Trials Has Been Declining
  • Looming Patent Expiration Dates And Growing Generic Competition Erode Market Share
  • Increasing Breadth And Depth Of A Product Portfolio
  • The Potential For Cost Savings Acts As A Stimulant For A Large Proportion Of M&as
  • Sharing Risk To Dilute Pressures
  • Geographical Expansion And Joining Competencies To Increase Market Share
  • Resistors Of M&a In Pharma
  • Problems With Integration Can Result In Divorce
  • High Demand Results In Rising Bids
• Chapter 3 Overview Of M&a Activity In The Past Two And A Half Years
  • Trends In Deal Values
  • Deals Under $1 Billion Are The Most Common
  • Higher Premiums Observed For Early-Stage Companies
  • Alliances Are On The Rise As These Offer A More Cautious Approach
  • M&as Of The Future: Less Risk Through Milestone Payments
  • Ipo Valuations Remain A Challenge: As Available Capital Shrinks More M&a Activity Is Predicted
  • Big Pharma's Giants Remain The Most Acquisitive Companies
  • Top Big Pharma Companies Opting For M&a
  • Pfizer
  • Roche
  • Glaxosmithkline (Gsk)
  • Johnson & Johnson
  • Astrazeneca
  • Bayer Ag
  • Merck & Co
  • Novartis
  • Eli Lilly
  • Roche's Long History Of M&as
  • Genentech
  • Chugai
  • Small Pharma Is The Industry Most Involved In M&a
  • Consumer Care Was The Main Target For Companies Looking To Diversify
• Chapter 4 Biotechs Are Popular Acquisition Targets In A Quest To Enter The Biologics Arena
  • Overview Of The Biotech Industry
  • M&as Within European Biotechs
  • Monoclonal Antibodies Are Driving M&as In The Biotech Sector
  • Five Blockbuster Monoclonal Antibodies Will Continue To Dominate This Sector
  • Monoclonal Antibodies Are Proving To Be A Goldmine Due To Their Incredible Commercial Potential
  • Astrazeneca Acquires Cat To Enter The Biologics Market
  • Astrazeneca Acquires Medimmune To Further Enhance Its Monoclonal Antibody And Vaccine Portfolio
  • The Outlook For Astrazeneca After The Biotech Acquisition Frenzy
  • Glaxosmithkline Steps Up With Biotech Pioneer Domantis
  • Merck Kgaa Enters The Biotech Sector For The First Time Through The Acquisition Of Serono
• Chapter 5 Oncology-Focused Companies Are Prime Acquisition Targets
  • Companies Are Attracted To The Most Profitable Markets
  • Oncology Sparks A Wave Of Interest Across All Sectors
  • The Ones To Watch In Oncology
  • Infectious Diseases And Oncology Were The Primary Therapy Area For The Biotech Acquisitions
  • Celgene And Pharmion: Portfolio Synergy To Become A Leader In A Niche Market
  • Ucb Strengthens Its Cns Portfolio Through The Purchase Of Schwarz Pharma
• Chapter 6 The Rise Of Acquisition Activity By Japanese Pharma Companies
  • Us Companies Are The Main Foreign Target For Japanese Acquirers
  • Overview Of The Japanese Pharmaceutical Market
  • Takeda Buys Millennium Pharma To Expand In The Us
  • Eisai Buys Morphotek And Mgi Pharma To Boost Its Maturing Drug Portfolio
  • Mitsubishi Pharma And Tanabe Seiyaku Join Forces
  • Will Japan Pharma Become More Interesting Acquisition Targets As The Push For Innovation Continues?
  • The Rise Of Specialty Pharma In Japan: License In Drugs Or Sell Domestic Drugs Abroad?
• Chapter 7 Generic Firms Keep To Their Own
  • Overview Of The Generics Market
  • Us Generic Companies Are Expanding Abroad
  • The Generics Sector Is Highly Developed In India
  • Indian Generics Companies Have Been Acquisition Targets
  • .But Now More Indian Generics Are Acquiring Companies Outside India
  • Ranbaxy's M&a Strategy Reflects The Anticipated Growth In The Immature Markets
  • Generics Companies Are Looking To Expand In Central And Eastern Europe
  • Mylan Expands Globally With The Purchase Of Merck's Generic Division
• Chapter 8 Technology Targets Are Expected To Shift Towards Rnai And Wound Care
  • Genomics Companies Are The Main Acquisition Targets Within The Technology Sector
  • M&as For Rnai Are Expected To Rise
  • More Companies Are Realizing The Commercial Potential Of Rnai-Based Therapeutics
  • Tekmira And Protiva: Two Niche Technology Firms Join Forces
  • Merck & Co. Buys Sirna Therapeutics
  • Wound Care
• Chapter 9 Bibliography
  • Publications And Online Articles
  • Datamonitor Resources
• Glossary Of Terms
  • Appendix
• List Of Tables
  • Table 1: Acquirer And Target Company Classification
  • Table 2: Top 20 M&as By Deal Value, 2006-Mid 2008
  • Table 3: Who Is Buying Who: M&as According To Industry Type, 2006- Mid-2008
  • Table 4: Examples Of M&a Deals Where The Acquirer Has Targeted Monoclonal Antibodies
  • Table 5: Examples Of M&a Deals Where The Acquirer Has Targeted Vaccines
  • Table 6: Us Generic Companies Are Looking Abroad Due To Saturation And Intense Competition In Their Domestic Market
  • Table 7: Indian Generics Have Been Targeted By Different Companies
  • Table 8: Generic Companies In India Have Become More Involved In M&as
  • Table 9: M&a Deals Targeting Genomics, 2006-Mid-2008
  • Table 10: Classification Of Big Pharma, Mid Pharma And Biotech Companies
• List Of Figures
  • Figure 1: Mega-Mergers May Provide Just Short-Term Solutions And Hinder Innovation
  • Figure 2: Astra's And Zeneca's Main Products In 1999 Complemented Each Other's Pipeline
  • Figure 3: Mutual Benefits Of The Pfizer/Warner Lambert Acquisition
  • Figure 4: Pfizer's Post-M&a Growth Was Short-Lived
  • Figure 5: Issues That Led Glaxosmithkline To Restructure Its R&d Model
  • Figure 6: The Drivers For M&a Target The Current Problems For Big Pharma
  • Figure 7: Nme And Bla Approvals Are Decreasing, 1990-2007
  • Figure 8: Forecast Of Lost Sales Due To Patent Expiry And Main Drugs Going Off-Patent, 2007-11
  • Figure 9: Four By Four Matrix Showing How M&as Can Allow A Company To Grow
  • Figure 10: Average Deal Value, 2006-Mid-2008
  • Figure 11: Deal Value Between 2006 And Mid-2008 Is Mostly Under $1 Billion
  • Figure 12: Trends Show Mergers Are Declining As Acquisitions Are Increasing
  • Figure 13: Top Pharma Companies Involved In M&a, 2006-Mid-2008
  • Figure 14: Top Big Pharma Companies Involved In M&a, 2006-Mid-2008
  • Figure 15: Summary Figure Showing Roche's M&a Activity (2006-June 2008) And The Benefits Provided By Each Transaction
  • Figure 16: Targets Of Other Types Of Companies, 2006-Mid-2008
  • Figure 17: Needs And Challenges That Are Driving Pharma-Biotech Deals Are Complementary
  • Figure 18: Sales And Marketing Assistance Is The Main Reason Biotechs Engage In M&as
  • Figure 19: Antibodies Are The Driving Force Behind M&as For Big Pharma And Biotech Player
  • Figure 20: Commercial Benefits And Drawbacks Of Mabs, Vaccines And Therapeutic Proteins
  • Figure 21: Astrazeneca's Inheritance From Its Acquisitions
  • Figure 22: Astrazeneca's Acquisitions Will Have Short-Term Financial Benefits
  • Figure 23: Oncology, Cns And Aiid Are Commercially The Most Attractive Markets
  • Figure 24: Therapy Area Targets Of M&as In The Pharmaceutical Industry, 2006-Mid-2008
  • Figure 25: Big Pharma's And Mid Pharma's M&as Targeted Primarily Cardiovascular-Focused Companies, 2006-Mid-2008
  • Figure 26: Big Pharma's And Mid Pharma's M&as Targeted Primarily Oncology Companies If Biotech Are Included In The Analysis By Therapy Area, 2006-Mid-2008
  • Figure 27: Small Pharma's Deals Targeted Oncology And Cns-Focused Companies, 2006-Mid-2008
  • Figure 28: Biotech's Main Therapy Area Targets For M&a Deals, 2006-Mid-2008
  • Figure 29: Japan Is The Only Acquiring Country Which Has Had An Increase In The Number Of M&as For 2006-Mid-2008
  • Figure 30: Hurdles In The Japanese Market And Financial Benefits Offered In The Us Are Driving Japanese Pharma To Increase M&a Activity
  • Figure 31: Chugai Is Set To Grow The Fastest Until 2012, Unlike Dainippon Sumitomo And Eisai Which Are Likely To Experience Negative Growth
  • Figure 32: Eisai Has Taken Significant Steps To Boost Its Pipeline
  • Figure 33: The Merging Of Mitsubishi Pharma And Tanabe Seiyaku Will Boost Their Biologics Presence
  • Figure 34: M&a Trends For Us/European Generic Firms, Indian Generic Firms, And Trends That Are In Common For All
  • Figure 35: M&a Deals Targeting Technology Firms, Jan 2006 - June 2008
  • Figure 36: Complementary Needs Of Merck & Co. And Sirna Result In Good Strategic Fit