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Deal-making declines by 18% in a year as pharmaceutical companies tighten their belt
Oxford, UK 25 January 2012 - Overall pharmaceutical deal-making activity fell by 18% in 2011 as pharmaceutical companies cut R&D expenditure and streamlined their research and development activities, according to research conducted by the UK advisory firm PharmaVentures.
According to a review of PharmaVentures' PharmaDeals® database, licensing deals fell by 16% while the most sought-after assets commanded sizeable premiums in 2011. In contrast, M&A activity remained robust in 2011 and M&A deal values actually rose by 30%, although contingent payments were commonplace.
The research reveals that oncology based deals continued to dominate the landscape with Roche being the most prolific deal-maker.
Fintan Walton, Chief Executive of PharmaVentures said: "These results are consistent with our own observations gained through our deal-making activities on behalf of our international clients. Our industry is undergoing a rapid and major transformation driven by declining R&D productivity and blockbuster drugs coming off patent. However, with quality assets commanding higher premiums there is still a significant opportunity for great deals to be done".
Emerging markets remained at the top of the deal-making agenda for many of the major pharmaceutical companies in 2011. Faced with declining sales growth in Western markets, these companies are looking to exploit the substantial opportunities that emerging markets, and India and China in particular, provide. AstraZeneca, for example, moved to strengthen its position in China in December 2011 by agreeing to acquire Guangdong BeiKang Pharmaceutical, a manufacturer of generic injectable antibiotics. Other big pharma companies went down the joint venture route in 2011 with Bayer HealthCare partnering with Zydus Cadila to establish a sales and marketing joint venture in India, and Merck & Co. following suit by creating a large-scale joint venture with Sun Pharmaceutical Industries to develop and commercialise novel combinations and formulations of branded generics in emerging markets.
PharmaVentures' research drew on its PharmaDeals database (www.pharmadeals.net), which follows, analyses and records deals world-wide and contains over 43,000 deal records.
For further information, contact:
Dr Fintan Walton
Chief Executive
+44 1865 332700
fintan.walton@pharmaventures.com
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Note to Editors
PharmaVentures Limited (http://www.pharmaventures.com) is a leading international corporate advisory firm supporting its clients' growth ambitions in the health care industry. It has considerable experience and expertise in the field of tangible and intangible transactions, providing advice at both a strategic level, as well as acting as advisor and broker at an implementation level. Its transactional experience includes licensing, joint ventures, mergers, acquisitions and divestments. Its clients are worldwide, including Europe, the USA and AsiaPacific. Clients range from start-ups to global pharmaceutical corporations, diversified industrial corporations, investment houses and government bodies. Its subsidiary PharmaTelevision produces the highly popular PharmaDeals® range of intelligence products including analysis tools and reports as well as the world's first dedicated online pharmaceutical television channel PharmaTelevision® (http://www.pharmatelevision.com).
Now in its 18th year, PharmaVentures is based in Oxford, UK, and employs over 30 people.