The Evolving Pharma M&A Landscape: Emerging trends and predicted post-blockbuster targets - 2009/09/01 - Business Insights

Report title: The Evolving Pharma M&A Landscape: Emerging trends and predicted post-blockbuster targets

from Business Insights
242 page report published Sep 01, 2009

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Introduction: Pharmaceutical market growth rates have halved inside the past five years, and will remain modest into the next decade. At the same time, new drug approval rates have slowed. With costs continuing to rise, the industry's margins are already being squeezed, but will come under growing pressure as payers adopt more stringent pharmaceutical cost-containment policies and as patents on a slew of blockbusting brands expire. The world's ten biggest pharmaceutical companies have committed almost $230bn to M&A deals since the beginning of 2007. The size of their assets and the cash-generating capabilities of their existing businesses have rendered them largely immune from the effects of the global economic downturn, during which big pharma M&A spending has actually accelerated. Key M&A announcements will continue to be made on a regular basis into 2010 and beyond.Key findings of this report
- The pharmaceutical industry's ten biggest players face the expiry of patents on brands that generate annual revenues of more than $130bn within the next five years. This 'patent cliff' is driving the acquisition of biotech assets designed to strengthen big pharma pipelines.
- Biotech/biopharma companies were the subject of nearly half the M&A transactions completed or announced by leading pharmaceutical companies between January 2007 and July 2009, and accounted for four of the ten biggest M&A deals witnessed in that period.
- The world's ten biggest pharmaceutical companies generated prescription drug sales totaling $308bn in 2008. Their operations generated aggregate net cash of more than $106bn and pre-tax profits of $81bn. At the end of 2008 they were sitting on collective net assets worth $354bn.
- The ten leading companies have completed or reached definitive agreements on 64 M&A deals since January 2007. Together, they have committed almost $230bn to healthcare M&A transactions in the past two-and-a-half years.
- Biotech companies aside, consumer healthcare and generic businesses are among the most popular acquisition targets, reflecting a desire on the part of big pharma to reduce levels of exposure to conditions in the global market for prescription drugs.
- Two of the world's five biggest generics businesses are active candidates for disposal. Sandoz and Teva aside, all of the world's other leading generic companies are potential acquisition targets.Use this report to:
- Quantify individual pharmaceutical company exposure to major patent expiries in the next five years.
- Compare the strengths and weaknesses of big pharma pipelines and identify the gaps that biotech acquisitions will be used to plug.
- Track recent M&A activity by the world's ten biggest pharmaceutical companies in terms of both deal values and strategic intent.
- Gain valuable insights into the strategic approaches to M&A activity being pursued by individual big pharma CEOs.
- Understand why most previous pharmaceutical mega-mergers failed to deliver long-term benefits, and how Pfizer and Merck hope to avoid repeating the industry's past mistakes.
- Identify prime biotech/biopharma acquisition targets and the global, regional or national generic businesses most likely to attract acquisition bids.

Source:

Business Insights

Document ID:

rbhc0237

Industry:

Pharmaceutical

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Title	Starting Page	Number of Pages
Sections
Table of Contents The Evolving Pharma M&A Landscape Executive Summary 12 Pharmaceutical industry pressure points 12 Can mega-mergers solve the industry's problems? 13 Big pharma M&A 13 Generic industry M&A 14 Biotech industry M&A 15 Chapter 1 Pharmaceutica	0	1
Table of Contents	0	1
The Evolving Pharma M&A Landscape Executive Summary 12	0	1
Pharmaceutical industry pressure points 12	0	1
Big pharma M&A 13	0	1
Generic industry M&A 14	0	1
Biotech industry M&A 15	0	1
Chapter 1 Pharmaceutical industry pressure points 18	0	1
Summary 18	0	1
Introduction 19	0	1
Diminishing returns 20	0	1
Stock market reaction 22	0	1
Key factors behind the squeeze on big pharma 22	0	1
Patent expiries 23	0	1
Pharmaceutical cost-containment 25	0	1
Deteriorating R&D risk/return ratios 27	0	1
Adapting to the new market environment 30	0	1
Cost-cutting and efficiency increases 31	0	1
Enhancing pipelines 33	0	1
Corporate restructuring 34	0	1
Summary 36	0	1
Introduction 37	0	1
The last wave of mega-mergers 38	0	1
Mega-merger legacies 38	0	1
Pfizer â€“ transformed or transfixed? 40	0	1
The changing face of Pfizer 41	0	1
Stock market judgments 43	0	1
Pfizer tries again 45	0	1
Transaction details 46	0	1
Impact of the Wyeth acquisition 46	0	1
Portfolio 46	0	1
Geographical presence 48	0	1
Pipeline 49	0	1
Exposure to patent expiries 50	0	1
Finances 50	0	1
Verdict on the Pfizer/Wyeth deal 51	0	1
Merck seeks M&A shelter 53	0	1
Transaction details 53	0	1
Impact of the Schering-Plough acquisition 55	0	1
Portfolio 55	0	1
Geographical presence 57	0	1
Pipeline 58	0	1
Exposure to patent expiries 59	0	1
Finances 60	0	1
Verdict on the Merck/Schering-Plough deal 61	0	1
Looking beyond the mega-merger 63	0	1
Chapter 3 Big Pharma M&A 66	0	1
Summary 66	0	1
Introduction 67	0	1
Recent M&A activity 70	0	1
M&A targets 73	0	1
Future M&A trends 74	0	1
The shrinking pharmaceutical village 76	0	1
Pfizer 78	0	1
Company background 78	0	1
Portfolio and geographical reach 79	0	1
Pipeline status 81	0	1
Exposure to patent expiries 82	0	1
Strategic direction 84	0	1
Recent M&A activity 85	0	1
Bolstering the pipeline 85	0	1
Future M&A potential 88	0	1
Merck & Co 89	0	1
Company background 89	0	1
Portfolio and geographical reach 90	0	1
Pipeline status 92	0	1
Exposure to patent expiries 93	0	1
Strategic direction 94	0	1
Recent M&A activity 95	0	1
The move into biosimilars 96	0	1
Future M&A potential 97	0	1
Sanofi-Aventis 99	0	1
Company background 99	0	1
Portfolio and geographical reach 100	0	1
Pipeline status 102	0	1
Exposure to patent expiries 102	0	1
Strategic direction 103	0	1
Recent M&A activity 104	0	1
Bolstering the pipeline 105	0	1
Building a generics business 106	0	1
Investing in animal health 107	0	1
Future M&A potential 108	0	1
GlaxoSmithKline 111	0	1
Company background 111	0	1
Portfolio and geographical reach 112	0	1
Pipeline status 113	0	1
Exposure to patent expiries 114	0	1
Strategic direction 116	0	1
Recent M&A activity 116	0	1
Diversification 118	0	1
Supporting a push into emerging markets 118	0	1
Feeding the pipeline 119	0	1
Future M&A potential 120	0	1
Novartis 122	0	1
Company background 122	0	1
Portfolio and geographic reach 123	0	1
Pipeline status 125	0	1
Exposure to patent expiries 126	0	1
Strategic direction 127	0	1
Recent M&A activity 128	0	1
Focused diversification 128	0	1
Strengthening the pharma business 129	0	1
Future M&A potential 130	0	1
Roche 132	0	1
Company background 132	0	1
Portfolio and geographical reach 133	0	1
Pipeline status 136	0	1
Exposure to patent expiries 137	0	1
Strategic direction 138	0	1
Recent M&A activity 138	0	1
Gaining full control of Genentech 139	0	1
Accessing novel products and technologies 140	0	1
Strengthening the diagnostics business 142	0	1
Future M&A potential 143	0	1
AstraZeneca 144	0	1
Company background 144	0	1
Portfolio and geographical reach 145	0	1
Pipeline status 148	0	1
Exposure to patent expiries 149	0	1
Strategic direction 151	0	1
Recent M&A activity 151	0	1
The push into biologics 152	0	1
Future M&A potential 153	0	1

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