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Market watchers predict more mega-M&A
Think the pharma megamerger is done ... over ... finito? Think again. Some analysts and money men are saying that the drug industry is still ripe for consolidation. After all, no one company has more than 8 percent of the global market for prescription drugs.
And given that market shares are in the single digits, says noted venture capitalist G. Steven Burrill of Burrill & Co., "That would generally indicate that we have a ways to go on consolidation." Yep, says Simon King, a senior analyst at Datamonitor. He told Chemical & Engineering News, "There's definitely a couple of large M&A events left in Big Pharma."
Large M&A events? We can almost hear the market-watchers speculating now. Who might it be? Eli Lilly? Bristol-Myers Squibb? Send us your ideas in the comments.
- get the news from C&E
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Comments
By Adam Bianchi | Posted 5:32pm | January 11, 2010
I would be somewhat surprised to see another megamerger this year - the jury is out on the long-term value creation (plus or minus) of the recent deals. It appears that M&A management is more finely tuned this round, but it's too early to say whether these megamergers were "good" or "bad."
I think what you will see a great deal of this year is Pharma (and Big Biotech) picking up good potential science from struggling companies. Until Venture Capital dives back in, it's going to be difficult for all but the flashiest early-stage companies to get the capital they need to get to market.
While I would expect BIG-BIG M&A to slow down, I definitely foresee big-small deals accelerating in 2010. If the economic recovery takes hold, you should see a normalization of the Pharma-Biotech ecosystem by 2011.
Adam Bianchi
http://www.cuttingedgeinfo.com/mergers-acquisitions/
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