Please login to the form below

Not currently logged in
Email:
Password:

Pharma M&A 'back to pre-recession levels'

Industry's growing appetite for emerging market deals was a major driver of the growth

Merger and acquisition activity in the pharmaceutical sector rebounded in 2011 to reach $224bn, the highest level since 2007 and 18 per cent up on 2010, according to international law firm Freshfields Bruckhaus Deringer.

One of the major drivers for the increase was the appetite of pharma companies to increase their presence in emerging markets, with M&A deals involving pharma companies in the BRIC economies (Brazil, Russia, India and China) up 189 per cent on 2006 levels.

BRIC deals accounted for 3 per cent of the total M&A activity in 2011, up from 0.8 per cent in 2006, according to the report.

"M&A activity in these regions therefore continues to gain momentum, and relevance, as companies seek to access new markets, distribution networks and local market expertise," said Julian Long, head of Freshfields' health sector group.

"Over-the counter pharmaceuticals and domestic generics and manufacturing companies will increasingly be focal targets for diversified players."

The US topped the list of deal volumes and values, accounting for more than 800 deals and $162bn of the worldwide tally, with China leading the charge among the emerging markets with 200 deals worth $4.3bn.

Another major driver is the need to bolster pipelines, with 35 per cent of pharma's top-20 prescription medicines facing patent expiry within the next two years in the US, and half already off-patent, according to Freshfields.

Meanwhile, the volume of licensing agreements aimed at drug discovery also increased in 2011 in line with M&A activity, rising 14 per cent on 2010 and 178 per cent on 2000.

"Licensing agreements, as opposed to pure M&A, hedge the risk of drug discovery without the significant up-front cash investment needed to develop a product from scratch," said Long.

"Over the medium term, the sector will likely see more licensing collaboration and greater focus on development-risk sharing as big pharma seeks to boost productivity and investors call for better returns on research and development efforts," he added.

2012 has already seen a number of pharma deals, including Boehringer and Forma Therapeutics' $850m cancer drug alliance and Genentech and Xenon's $646m pain drug research tie-up.

17th January 2012

Share

Subscribe to our email news alerts

Featured jobs

PMHub

Add my company
Fishawack Health

Fishawack Health is the leading global commercialization partner for the modern life science era. Established in 2001 and headquartered in...

Latest intelligence

Is communication failing us?
Compelling people to care in a world oversaturated with news and information...
Are your field teams ready to excel in the new era?
A qualitative research approach to help you critically assess post-pandemic learnings and ignite the potential of meaningful interactions with HCPs....
5 Healthcare Marketing Blunders | How To Avoid Them.
Here are 5 healthcare marketing blunders and how best to avoid them....