Updated on 14 May 2015
The year recorded 1215 deals, closed and announced, sealing $ 379.5 billion in total value
Singapore: Pharmaceutical, medical technology and biotech sector witnessed a euphoria when mergers and acquisition activities in 2014 soared all-time high. The year recorded 1215 deals, closed and announced, sealing $ 379.5 billion in total value. According to Mergermarket, an analytic and intelligence firm on global deals, medical and biotech sector closed around 869 deals clocking $354.3 billion by Q3 2014 and H1 2014 hit the highest half-year value on record with $260.2 billion, marking an increase of 227.8 percent from H1 2013, that valued at $ 79.4 billion.
Actavis' acquisition of Allergan at a whopping $63 billion and Forest Laboratories at $23 billion were the highest valued deals of the year. As high as eleven transactions betted on large scale deals and four were bracketed above $10 billion. Actavis' aggressive consolidation strategy has strengthened its stand in the market with large product profile, including novel and generics drugs, under its umbrella. Novartis, on the other hand, aimed to refocus on its business by diluting non-performing assets and swapping profile with GSK to focus on core business areas. Novartis acquired GSK's oncology profile at $15 billion and GSK acquired a large basket of over the counter drugs.
Novartis also let go its non-influenza vaccine business to GSK and animal health unit to Eli Lilly at $5 billion respectively. Analysts believe that companies would continue to prune their product profiles to garner maximum profit from their acquired business. In the years to come, pharmaceutical companies would align and re-align their generics, novel and other the counter products to remain competitive in the industry.
Actavis, for instance, created a large combined profile of specialty pharmaceutical products with the acquisition of Forest Laboratories at $28 billion. The company is now anticipating annual revenue of $15 billion in 2015 post acquisition. According to Actavis, the pro forma combination of two companies would churn $2 billion revenue in CNS franchise, $1 billion revenue in gastroenterology and women's health and $500 million in cardiovascular, urology and dermatology pipeline, respectively.
Similarly Bayer that has larger interest in over the counter products, managed to acquire the profile from Merck at $14.2 billion amid an intensive competition. Bayer and Merck have also shaken hands to jointly develop cardiovascular and pulmonary artery hypertension drug. In another deal, Roche shelled out $8.25 billion to acquire InterMune.
China-A surprise package
China emerged as a hot bed of the increasing interest of global as well as domestic pharmaceutical companies to strengthen in the emerging market. In a bid to expand and further penetrate in China and emerging markets, Bayer acquired Dihon Pharmaceutical, a China based company specializing in OTC dermatology products and herbal traditional Chinese medicine (TCM) products for women's health indications, with presence in Nigeria, Vietnam, Myanmar and Cambodia.