Pharma sector set for wave of mergers, acquisitions: study

May 30, 2016

The pharmaceuticals sector is facing an intensive period of mergers and acquisitions in the coming years, even if US firms Pfizer and Allergan recently failed to tie the knot, the corporate consultancy firm EY said Monday.

"We're going to see a high level of investments and divestments in the pharmaceuticals sector in the coming years," said Gerd Stuerz, analyst at EY.

In April, Pfizer and Allergan called off a $160-billion (144-billion-euro) tie-up to create a new world leader in pharmaceuticals ahead of Switzerland's Novartis due to a US crackdown on tax-saving .

But that is unlikely to signify the end of a wave of major deals in the sector, EY said.

"Companies will sell off entire divisions or buy new ones in order to strengthen their position," said another expert Siegfried Bialojan.

In face of fierce competition, external growth is now key for many companies.

"Pharmaceutical groups can only present innovations quickly if they buy these from outside," Bialojan argued.

After a record year for M&A (mergers and acquisitions) in the pharmaceuticals sector in 2014, 2015 would have been even better if the tie-up between Pfizer and Allergan had materialised.

Bialojan predicted that mergers of a scale of around $200 billion would become the "new norm" in the sector.

A number of major deals have been signed in recent years. After its failure to acquire Allergan, Pfizer recently announced plans to buy Anacor Pharmaceuticals, a specialist in eczema treatment, for more than five billion dollars.

It is also interested in Medivation, a California-based biotechnology firm specialising in cancer treatments that is also coveted by French group Sanofi and US firm Amgen.

Also in the US, Abbott Laboratories and St. Jude Medical, leading makers of heart care and coronary devices, announced a $25 billion merger to better target the rising levels of cardiovascular disease in aging populations.

German pharmaceuticals and chemicals giant Bayer is offering 55 billion euros for Monsanto, a bid the US firm has rejected for now.

Explore further: Medivation opens door to merger talks with Pfizer, Amgen

Related Stories

Medivation opens door to merger talks with Pfizer, Amgen

May 10, 2016
US biotech company Medivation has opened the door to being bought by either Pfizer or Amgen, a person familiar with the matter told AFP Tuesday.

Pfizer buying skin drug maker Anacor for $5.2 billion (Update)

May 16, 2016
Pfizer is fortifying its key immunology and inflammation drug business, snapping up a small maker of skin disorder treatments for about $5.2 billion, weeks after the U.S. Treasury Department torpedoed Pfizer's planned $160 ...

Pfizer, Allergan CEOs: Tie-up aims for growth, not cost cuts

January 12, 2016
The heads of drugmakers Pfizer and Allergan said Tuesday that the record $160 billion combination they're planning is meant to produce more medicines and boost revenue, not to just slash jobs and other costs as the companies ...

Pfizer, Allergan to merge in $160 bn tax-saving deal (Update 3)

November 23, 2015
US-based Pfizer announced Monday a $160 billion merger with Ireland-based Allergan to create the world's biggest pharmaceutical group and shift to a lower-tax jurisdiction despite government policies discouraging such deals.

Pfizer, Allergan weigh blockbuster merger: reports

October 29, 2015
Pharmaceutical giant Pfizer recently approached Botox-maker Allergan over what would be the biggest takeover deal this year, The Wall Street Journal said Wednesday.

US Treasury ramps up war on tax-evading mergers

November 19, 2015
The US Treasury announced new measures Thursday to block "inversion" mergers designed to let companies avoid US taxes, placing a possible obstacle to Pfizer's potential $150 billion mega takeover of Ireland-based Allergan.

Recommended for you

Cancer drugs' high prices not justified by cost of development, study contends

September 12, 2017
(HealthDay)— Excusing the sky-high price tags of many new cancer treatments, pharmaceutical companies often blame high research and development (R&D) costs.

Non-psychotropic cannabinoids show promise for pain relief

September 4, 2017
Some cancers love bone. They thrive in its nutrient-rich environment while gnawing away at the very substrate that sustains them, all the while releasing inflammatory substances that cause pain—pain so severe that opioids ...

Fentanyl drives rise in opioid-linked deaths in U.S.

August 31, 2017
(HealthDay)—Fentanyl, a synthetic narcotic, is a key player in America's continuing epidemic of opioid-related overdose deaths, two new studies report.

Eating triggers endorphin release in the brain

August 28, 2017
Finnish researchers have revealed how eating stimulates brain's endogenous opioid system to signal pleasure and satiety.

Cholesterol-lowering drugs may fight infectious disease

August 21, 2017
That statin you've been taking to lower your risk of heart attack or stroke may one day pull double duty, providing protection against a whole host of infectious diseases, including typhoid fever, chlamydia, and malaria.

Data revealed under FOI shows benefits of multiple sclerosis drug currently blocked by regulators

August 17, 2017
A drug that is blocked by the EU regulatory system has now been found to improve the quality of life of people with multiple sclerosis (MS), according to a study by Queen Mary University of London (QMUL).

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.