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Mergers and Acquisitions in the Pharmaceuticals Sector, 2009

Critical success factors for competing in a consolidating market

Publication Date April 2009
Publisher URCH Publishing
Product Type Report
Pages 111
ISBN Number not applicable
Product Code URC00163

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£1,955.00
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Summary

"2009 is set to redefine the structure and dynamics of the pharmaceutical industry in a way not seen since the year 2000"

Background

On 26th January 2009, Pfizer announced plans to acquire Wyeth for $68 billion. Pfizer's CEO, Jeffrey B Kindler, insisted the deal would be different from the company's earlier mega-deals involving the acquisitions of Pharmacia (2002) and Warner-Lambert (2000) - the acquisition of Wyeth would provide a broad and diversified portfolio, rather than been focused on a single product or cost-cutting. Pfizer's strategy of growing its portfolio through a mega M&A deals follows the 2008 acquisitions of Millennium by Takeda and ImClone by Eli Lilly.

These major deals are likely to result in two alternative industry responses:

  • a wave of consolidation involving further mega-deals;
  • the emergence of independent players that continue to build their portfolios through internal development, licensing and smaller scale acquisitions.

Leading pharmaceutical and biotechnology companies must decide how best to respond Pfizer's proposition that 'size matters'. Those that choose to consolidate will have to identify the best prospects, consolidate portfolios and execute synergy cost savings. Those that choose not to embark down the mega-deal path will still have to adapt to a more consolidated world in which broad, diverse portfolios and an efficient cost base or a minimum requirement to compete.

Report Purpose

Mergers and Acquisitions in the Pharmaceuticals Sector, 2009 - Critical success factors for competing in a consolidating market from URCH Publishing, explores the merits of the mega-deal in contrast to a more measured portfolio growth strategy and highlights the key opportunities and challenges presented by both business models. A detailed assessment of recent deals will identify the key issues and success factors, while the future M&A strategies of the leading pharmaceutical and biotechnology companies will also be assessed. Finally, the impact of consolidation in the industry will evaluated both at the organizational and therapeutic market level. All companies, big and small will be affected by the shake-up. This report will help to understand the key opportunities and challenges that lie ahead in order to formulate a robust response to a changing competitive landscape.

Some key findings from the report

  • Significant industry consolidation will lead to a fundamental shift in the market dynamics across all major product categories.
  • Since the beginning of 2006 a total of seven deals have been agreed with total transaction fees in excess of US$10 billion.
  • It appears likely that the mega-M&A wave started by the 3 deals in Q109 is not yet finished.
  • A handful of major players will follow in the footsteps of Pfizer and enter into major M&A transactions involving a significant step change in market shares and industry consolidation.

Reasons to buy this report

  • Understand the M&A environment in the pharmaceuticals industry.
  • Be informed about likely mergers and analyse companies that could be acquired in the near future
  • Assess the success factors that underlie a successful acquisition and review those which have delivered long-term shareholder value.
  • Draw on advice to manage your company to compete in an increasingly consolidated marketplace.
  • Gain insight into how drug portfolios are managed in an M&A situation and best value is extracted.

Contents

  • Summary
    • Pfizer's acquisition of Wyeth changes the game
    • A case of history repeating
    • Recent M&A trends
    • The future M&A landscape
    • Competing in a consolidated market
  • Chapter 1. Pfizer's acquisition of Wyeth changes the game
    • Introduction
    • Pfizer breaks away from the pack
    • Further consolidation is inevitable
    • Competing in a new world
  • Chapter 2. A case of history repeating
    • 21st century consolidation
    • Major pharmaceutical M&A deals
    • Degree of success and failure
  • Chapter 3 Recent M&A trends
    • Recent M&A deals
    • Bayer/Schering AG
    • Merck KGaA/Serono
    • Nycomed/Altana Pharma
    • UCB/Schwarz Pharma
    • Mitsubishi/Tanabe
    • Schering-Plough/Organon
    • AstraZeneca/MedImmune
    • Mylan/Merck Serono
    • Eisai/MGI Pharma
    • Takeda/Millennium
    • Teva/Barr Labs
    • Eli Lilly/ImClone
    • Daiichi-Sankyo/Ranbaxy
    • Pfizer/Wyeth
    • Merck/Schering-Plough
    • Roche/Genentech
    • Key deal characteristics
    • Critical success factors
  • Chapter 4. The future M&A landscape
    • Mega-M&A growth strategy
    • Incremental growth strategy
    • Leading pharmaceutical company growth strategies
    • Pfizer
    • Sanofi-Aventis
    • GlaxoSmithKline
    • Novartis
    • AstraZeneca
    • Johnson & Johnson
    • Merck
    • Eli Lilly
    • Roche
    • Wyeth
    • Bristol-Myers Squibb
    • Abbott Labs
    • Bayer
    • Amgen
    • Schering-Plough
    • Boehringer Ingelheim
    • Takeda
    • Genentech
    • Teva
    • Novo Nordisk
    • Summary of future M&A activity
  • Chapter 5 Competing in a consolidated market
    • Managing disruption
    • Delivering scale and scope
    • Balancing scale with focus
    • Critical success factors
    • Choose a path...
    • Execute a strategy...
    • Adapt to changes...
    • Appendices
    • Data sources
    • Key M&A deals
    • Leading pharmaceutical companies
    • Leading company profiles
  • Figures
    • Figure 1: Competing in a post Pfizer/Wyeth world
    • Figure 2: 21st century M&A trends
    • Figure 3: Relative success of M&A versus non-M&A growth strategies
    • Figure 4: Bayer's acquisition of Schering AG, July 2006
    • Figure 5: Merck KGaA's acquisition of Serono, September 2006
    • Figure 6: Nycomed's acquisition of Altana Pharma, September 2006
    • Figure 7: UCB's acquisition of Schwarz Pharma, September 2006
    • Figure 8: Mitsubishi's merger with Tanabe, February 2007
    • Figure 9: Schering-Plough's acquisition of Organon, March 2007
    • Figure 10: AstraZeneca's acquisition of MedImmune, April 2007
    • Figure 11: Mylan's acquisition of Merck Serono's generics unit, May 2007
    • Figure 12: Eisai's acquisition of MGI Pharma, December 2007
    • Figure 13: Takeda's acquisition of Millennium, April 2008
    • Figure 14: Teva's acquisition of Barr Labs, July 2008
    • Figure 15: Eli Lilly's acquisition of ImClone, October 2008
    • Figure 16: Daiichi-Sankyo's acquisition of controlling interest in Ranbaxy, November 2008
    • Figure 17: Pfizer's acquisition of Wyeth, January 2009
    • Figure 18: Merck's acquisition of Schering-Plough, March 2009
    • Figure 19: Roche's acquisition of remaining interest in Genentech, March 2009
    • Figure 20: Mega-M&A growth strategy
    • Figure 21: Incremental growth strategy
    • Figure 22: The M&A lifecycle
    • Figure 23: Delivering growth while minimizing risk
    • Figure 24: Pfizer: Integrated M&A and portfolio management
    • Figure 25: Protecting innovation and flexibility
    • Figure 26: Johnson & Johnson: Umbrella M&A and independent responsibility
    • Figure 27: Critical success factors in a consolidating market
  • Tables
    • Table 1: Top 10 pharmaceutical companies market share, 1999-2008
    • Table 2: The class of 1999
    • Table 3: Leading pharmaceutical M&A deals, 2000-2009
    • Table 4: Key performance indicators for M&A companies, 2007-08
    • Table 5: Key performance indicators for non-M&A companies, 2007-08
    • Table 6: Leading pharmaceutical M&A deals, 2006-2009
    • Table 7: Key performance indicators for Bayer's acquisition of Schering AG
    • Table 8: Key performance indicators for Merck KGaA's acquisition of Serono
    • Table 9: Key performance indicators for Mitsubishi's merger with Tanabe
    • Table 10: Key performance indicators for Schering-Plough's acquisition of Organon
    • Table 11: Key performance indicators for AstraZeneca's acquisition of MedImmune
    • Table 12: Key performance indicators for Mylan's acquisition of Merck Serono's generics division
    • Table 13: Top 20 pharmaceutical companies, 2008
    • Table 14: Pfizer's future growth strategy
    • Table 15: Sanofi-Aventis' future growth strategy
    • Table 16: GlaxoSmithKline's future growth strategy
    • Table 17: Novartis' future growth strategy
    • Table 18: AstraZeneca's future growth strategy
    • Table 19: Johnson & Johnson's future growth strategy
    • Table 20: Merck's future growth strategy
    • Table 21: Eli Lilly's future growth strategy
    • Table 22: Roche's future growth strategy
    • Table 23: Wyeth's future growth strategy
    • Table 24: Bristol-Myers Squibb's future growth strategy
    • Table 25: Abbott Labs' future growth strategy
    • Table 26: Bayer's future growth strategy
    • Table 27: Amgen's future growth strategy
    • Table 28: Schering-Plough's future growth strategy
    • Table 29: Boehringer Ingelheim's future growth strategy
    • Table 30: Takeda's future growth strategy
    • Table 31: Genentech's future growth strategy
    • Table 32: Teva's future growth strategy
    • Table 33: Novo Nordisk's future growth strategy
    • Table 34: Key M&A deals, 2000-09
    • Table 35: Top 50 pharmaceutical companies, 1999
    • Table36: Top 50 pharmaceutical companies, 1999 (continued)
    • Table 37: Top 20 pharmaceutical companies, 2008
    • Table 38: Pfizer: detailed company profile, 2008
    • Table 39: Sanofi-Aventis: detailed company profile, 2008
    • Table 40: GlaxoSmithKline: detailed company profile, 2008
    • Table 41: Novartis: detailed company profile, 2008
    • Table 42: AstraZeneca: detailed company profile, 2008
    • Table 43: Johnson & Johnson: detailed company profile, 2008
    • Table 44: Merck: detailed company profile, 2008
    • Table 45: Eli Lilly: detailed company profile, 2008
    • Table 46: Roche: detailed company profile, 2008
    • Table 47: Wyeth: detailed company profile, 2008
    • Table 48: Bristol-Myers Squibb: detailed company profile, 2008
    • Table 49: Abbott Labs: detailed company profile, 2008
    • Table 50: Bayer: detailed company profile, 2008
    • Table 51: Amgen: detailed company profile, 2008
    • Table 52: Schering-Plough: detailed company profile, 2008
    • Table 53: Boehringer Ingelheim: detailed company profile, 2008
    • Table 54: Takeda: detailed company profile, 2008
    • Table 55: Genentech: detailed company profile, 2008
    • Table 56: Teva: detailed company profile, 2008
    • Table 57: Novo Nordisk: detailed company profile, 2008