Big Pharma’s Shrinking Firepower for M&A Deals

VLUU L110  / Samsung L110Over the last two years, the gap between analysts’ estimates of big pharma sales and the global drug market forecast by IMS Health has widened significantly. In 2011, the overall drug market saw growth that overtook big pharma by approximately $20 billion; it is anticipated that this gap will further widen to $50 billion in 2012 because of major brands falling off the patent cliff.

A recent report by Ernst & Young, Closing the gap? Big pharma’s growth challenge and implications for deals, projects that the growth gap will reach $100 billion by 2015. As a result, big pharma is under increased pressure to drive growth through mergers and acquisitions (M&A). There is, however, another obstacle standing in the way—the firepower gap. Ernst & Young defines firepower as a company’s capacity for conducting M&A deals. Read more »

Illumina Continues to Reject Roche

Stephanie Sutton Pharm Tech EuropeIn February, I wrote that Roche could be in for a lengthy battle if it wants to acquire the gene-sequencing specialist Illumina. And indeed, the battle is still raging on. Here’s an update on some of the latest developments. Read more »

Roche and Illumina Ready the Trenches

Stephanie Sutton Pharm Tech EuropeAfter its high profile acquisition of Genentech in 2009, Roche is back in the M&A spotlight again. This time, the Swiss pharma giant has its eyes on the DNA sequencing company Illumina, which is based in San Diego in the US. However, both companies are digging their trenches in preparation for a potentially lengthy battle. Read more »

Is Biotech Following in Big Pharma’s Footsteps?

Erik Greb PharmTech editorBiologics are still the hot commodity in the drug industry. Observers call large-molecule drugs the therapies of the future, and these medicines’ complexity makes them difficult for would-be follow-on manufacturers to create. Big Pharma companies that have not yet acquired biopharmaceuticals firms are considering doing so to bolster their pipelines and profits. But not all biologics companies are living large, as data from Ernst & Young remind us. Read more »

Will Senator Kohl Thwart Drugmakers’ Strategy for Survival?

Erik Greb PharmTech editorMakers of small-molecule drugs are in treacherous waters. The Scylla of generic-drug competition rears on the horizon, ready to bite into innovators’ profits. At the same time, companies’ research-and-development productivity seems to have been sucked down into Charybdis. How will drugmakers survive these perils? Read more »

Big Pharma and Buyer’s Remorse

Erik Greb PharmTech editorTo make up for weak pipelines, and to take arms against a sea of generic-drug competitors, many large pharmaceutical companies have pursued mergers and acquisitions. This strategy began to gain popularity about 10 years ago, and the industry’s new motto seems to be “When the going gets tough, the big get bigger.” Has this strategy improved drugmakers’ pipelines or bottom lines? Read more »

A Prescription for New Jersey, and for the Drug Industry

Erik Greb PharmTech editorMention New Jersey to someone on the street, and he or she is likely to think of Springsteen, the Sopranos, or (God forbid) Snooki. But PharmTech readers know that New Jersey is an important state for the drug industry. Many big companies, such as Johnson and Johnson, sanofi-aventis, Novartis, and Pfizer, have headquarters or other offices in the state. And the Garden State’s drugmakers are facing the same difficulties that confront the industry at large. Read more »

The Latest Sanofi/Genzyme Rumors

Stephanie Sutton Pharm Tech EuropeBuying a new company isn’t an easy process, as clearly shown by one of the industry’s most talked about potential mergers: Sanofi and Genzyme have been talking for months now, but there’s still no indication that a deal will take place. Sanofi made a tender offer last year to acquire the company at $69 per share, but had to extend the original December 2010 deadline to 21 Janaury 2011 after less than 1% of shares were tendered. The tender offer is still open, but there’s no indication that the result will be favorable to Sanofi. Read more »

Success Is Unlikely on sanofi’s Terms

Erik Greb PharmTech editorThere was no joy in Paris, at least at sanofi-aventis (Paris) headquarters, on Friday. When the company’s offer to acquire Genzyme (Cambridge, MA) at $69 per share expired that day, fewer than 1% of the biopharmaceutical company’s outstanding shares had been tendered. In response, sanofi extended its deadline to January 21, 2011 without modifying the terms of its offer. Why should the company expect a different result in six weeks’ time? Read more »

Eli Lilly: the Pharmaceutical Industry’s Everyman

Erik Greb PharmTech editorWall Street analysts gave Eli Lilly (Indianapolis, IN) executives the third degree last Thursday when the company presented its third-quarter results. Lilly’s revenue had increased only 2%, mostly because it had raised its prices. Although demand for its products had stayed flat, the company boosted its profits by 38% mostly through layoffs and cost-cutting measures. The patents on many of the company’s top drugs (e.g., Zyprexa and Actos) will expire in the next few years, however, and no new drugs seem poised to replace them. Analysts wanted to know how Lilly would weather the storm. Read more »

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