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Deal Tectonics: at the fault line of growth goals and competitive pressures

Mergers and acquisitions (M&A) in the biopharmaceutical industry skyrocketed in 2015, with the value of 2015 announced deals totalling more than US$300b, a new record for the industry, according to EY’s Firepower Index and Growth Gap Report 2016, released today. Much of this activity was driven by companies seeking to create more focused businesses and close persistent revenue "growth gaps". The previous industry M&A record was set in 2014 exceeding US$200b in aggregate value. In 2016, a renewed focus on value-based drug pricing, staunch competition across key therapeutic battlegrounds and consolidated payer clout may exacerbate existing growth gaps, resulting in a continued feverish deal environment for this year and beyond. The EY Firepower Index measures biopharma companies' ability to fund M&A transactions based on the strength of their balance sheets and their market capitalization. Thus, a company's firepower increases when either its market capitalization or its cash and equivalents rise – or its debt falls.

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  Deal Techtonics
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26th February 2016

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  Deal Techtonics
PDF File: 1.6 MB

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