Emerging Business Models in the Pharmaceutical Industries ...

Key Findings in M&A
Overview
Consolidation among the main pharma players to
access more cash and marketing channels has led to
the emergence of four or five market leaders. Big
Pharma companies such as JnJ are exploring huge
alliancing options, and new ways to integrate with other
companies in terms of “licensing” and contract
manufacturing. Companies are adopting early
alliancing strategies to avoid high premiums being paid
at later stage. valuations. The need for more pipeline
products by Big Pharma companies working on the
networking model is also driving a larger number of
M&A deals.
• The major focus of M&A was on product based and
private equity backed transactions. However, the hunt
for products was so high that seven of the eight
acquisitions made were product based.
• North America is the dominant region for M&A activities
in the pharmaceutical sector. The Asia Pacific region
shows the highest growth in M&A activities, with a 25%
rise in the number of deals, due to the highly
fragmented pharmaceutical markets in India and China.
• The entire value of M&A activities in the
pharmaceutical industry during 1994-2003 has been
registered at $486 billion, with the largest deal being
$87 billion (Pfizer with Warner-Lambert).
• M&A is taking different forms through early alliances
with biotech companies, in-licensing and out-licensing.
Mergers & Acquisitions
• The number of alliances have risen from 100 per year
to 1,000 per year.
• Pharma and medical devices continue to show a larger
number of deals as compared to health care, which has
a more local and fragmented nature.
Product Based
Biotech
Region Based
Increased
Alliances
M&A
-Networking
-Business Model
Source: JSB Intelligence
Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 39
Big Pharma
Private Equity
Backed up
Transaction