M&A continues to be one of the prevalent strategies that many pharmaceutical companies take as a core driver for growth expectations in the sector. In the last few years, Merger and Acquisition deals have served as a prime force to address the changes in the pharmaceutical industry thereby bringing strong financial performances. Some of the underlying motivations of these M&A deals include, global expansions, wider portfolio offerings, advanced therapeutic solutions and increased leverage and scale.
The growth in pharmaceutical industry
The medical industry is expanding in dual ways, in its size and with the means it is capturing customers. No matter what times come, people always need to prioritize their health. The global market for pharmaceuticals has witnessed great growth in the last two decades and has a total revenue of US$ 1.25 trillion. This number reflects the mounting demand of medical devices and cutting edge technology to the medical sector. Yet, this time also comes in the era when the growth assets are hard to capture. Such reasons have made M&A deals even more important in the pharmaceutical sector.
Since, mergers and takeovers seem to be a learning sector; here we bring some imperative M&A deals of pharmaceutical sector that created their mark in the global medical technology market:
Pfizer Inc acquires anti-wrinkle Botox maker Allergan
Pfizer Inc announced merging with the anti-wrinkle Botox maker enterprise Allergan in November 2015. This was the biggest deal of the pharmaceutical industry that made the combined company the largest drug maker across globe. The deal was made to bring two leading companies for scaling scale, pipeline and diversity.
Capital Involved: US$160 billion
Year: November, 2015
Pfizer acquires Warner-Lambert
Pfizer announced acquiring its competitor Warner Lambert in 2000 at US$106.1 billion. The combined company was called Pfizer, and the deal was done to become the second largest drug company. This M&A deal was done with US$ 90.2 billion stock.
Capital Involved: US$ 90.2 billion
Year: 2000
Bristol-Myers Squibb acquires Celgene
Bristol-Myers Squibb announced taking over the global pharmaceutical company Celgene in April 2019. The M&A deal was done with providing the shareholders 1.00 share of the stocks from the new merger company with US$ 50 cash in hand. After the deal completion, Celgene became a subsidiary completely owned by Bristol-Myers Squibb.
Year: 2019
Capital Involved: US$74 billion
Sanofi acquires Aventis
The largest drug maker of France Aventis was acquired by Sanofi-Synthelabo for US$ 65 billion. The newly formed company was named Sanofi-Aventis. The official deal between the companies was finalized on 31st December 2004. The merger was made with the aim to take advantage of synergies for increasing development and reducing costs.
Capital Involved: US$65 billion
Year: 2004
Allergan acquired by Actavis
Actavis plc, the Dublin headquartered pharmaceutical enterprise announced completion of acquisition of Allergan Inc in a cash and equity mix deal on March, 17 2015. The acquisition created a pharmaceutical business with an unmatched growth profile. This combination created an enterprise with the sales revenue among the world’s top 10 pharmaceutical companies with annual combined revenue of US$ 23 billion.
Capital Involved: $66 billion
Year: 2014
Takeda Pharmaceutical’s acquisition of Shire
The London-based Takeda Pharmaceutical announced acquiring Shire for US$ 62 billion in 2018. The share investors received US$ 33.33 in cash with 0.39 Takeda shares or 1.678 Takeda American depositary shares for each share. This deal was the largest global purchase done by a Japanese company and positioned it in the top 10 global drug dealers.
Year: 2018
Capital Involved: $59.0 billion
Roche paid for Genentech
In 2009 Genentech was acquired by Roche with US$ 47 billion. This deal later proved to be quite beneficial for the company especially with their research and development field. In 2008 the top drugs of Genentech were Lucentis, Avastin, Herceptin and Rituxan which later created the revenue of around US$ 21 billion for Roshe as of 2018.
Capital Involved: $46 billion
Gilead supports cancer portfolio by acquiring Immunomedics
Gilead announced acquiring bio tech enterprise Immunomedics iron for USD 21 million in September 2020. The deal was aimed at strengthening the cancer portfolio by gaining access to a promising drug. For this deal Gilead offered to buy the outstanding shares of Immunomedics for US$ 88 per share.
Capital Involved: $21 billion
Year: 2020
Johnson & Johnson acquires Actelion
Johnson & Johnson announced on June 16 2017 the completion of acquiring Actelion Limited for US$ 30 billion in cash. This deal was done with the expectation of adding around US$ 1.3 billion in sales for 2017 and adjusted earnings per share by USD 0.07.
Year: 2017
Capital Involved: $30B
Pharmasset acquired by Gilead Sciences
Pharmasset Inc announced on November 21, 2011 that it has signed a definitive agreement under which Gilead Sciences lead will acquire it for US$ 137 per share. The deal was done in cash which valued Pharmasset at USD 11 billion.
Capital Involved: $11.2 billion
Year: 2011
The pharmaceutical industry holds the responsibility for researching, producing and distributing medicines and medical equipment and has a significant place in the economy of every country. Moreover, it is equally essential for the well-being of people as it involves bringing better and advanced level medical supplies to people. And these Merger and Acquisition deals are proof that it is a good way to boost the market of pharmaceuticals if planned with the proper strategy.
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