Updated on 18 June 2013
M&A Analysis - BioSpectrum Asia Top 20 Survey
The global bioscience industry, in 2012, reported 450 mergers and acquisitions (M&A) transactions valued at $67 billion, which is about 10 percent lower than the number of deals struck in 2011. As far as deal size is concerned, the largest transaction announced in 2012 was Bristol-Myers Squibb's acquisition of Amylin Pharmaceuticals, valued at $7 billion. No other deal came close. Second biggest deal to happen in 2012 was Watson Pharmaceutical's acquisition of Actavis Group at $5.5 billion.
According to IMAP Global Pharma & Biotech, M&A Report-2013, there has been a slowdown, summing up to $3.4 billion, in deals from western companies targeting at emerging markets in 2012. According to an analysis by Ernst & Young, M&A deals by big pharma companies accounted for 86 percent of the total value of deals between 2007 and 2009, but fell to 59 percent of the value of deals in the 2010-12. Most of the deals that were transacted in 2012 were carried out with the objective to replenish drug development pipeline, gain access to new molecules or to expand market of established products. Despite the slowdown, several life science firms are still looking for mergers & acquisitions (M&A) strategies as they face imminent patent cliffs and witness acute scarcity in their discover pipeline.
In South East Asia, acquisitions provided opportunities for rapid international expansion and also provided a platform to companies to gain competitive advantage through access to technology, local brand names, logistics, and distribution, while neutralizing local competition. Among South East Asian countries, Singapore (363 deals, $49.9 million) and Malaysia (481 deals, $22 million) recorded highest total M&A deal value in 2012. Western countries are increasingly eyeing innovation, research, and development to capitalize their intellectual property assets by gaining access to South East Asia's low-cost manufacturing and growing technical capabilities and know-how. Furthermore, while industry experts like Mr Shiraz Bugwadia, managing director, O3 Capital, India, and Mr Prashant Jain, AVP, O3 Capital, India, feel that forming joint ventures is the new Indian mantra; Mr Franc Kaiser, director, InterChina, China, feels that the M&A climate is going to heat up in 2013 in China, and Dr Kotaro Yoshida, senior research analyst at BioPharm Insight, Japan, says that Japan is the new M&A hot spots.
Other interesting facts and figures:
• What were the top 20 global transactions of 2012?
• What were the top 20 deals in the pharma and biotech sector in 2012?
Leading the Asian healthcare M&A deals in 2012, Chinese companies occupied three of the top six spots, mostly driven by pharmaceutical sector, compared to just one in 2011. The Asia Pacific region's largest healthcare M&A deal of 2012 was completed in October 2012 when CSPC Pharmaceutical Group acquired CSPC NBP Pharmaceutical for $1.16 billion.