Big Pharma has been moving into emerging markets and shoring up sales with generics for some time. Now, the biggest of Big Biotech is joining in. In a twofer deal, Amgen ($AMGN) has agreed to pay $700 million for Turkey's Mustafa Nevzat Pharma, which makes injectable generics for sale in its home country and the surrounding region.
The Turkish company has been up for sale since last summer, when it and Eli Lilly ($LLY) tried and failed to work out a partnership. The company's family owners then decided to shop it around, and several Big Pharmas were said to be looking at the deal. As Reuters reports, one of them was GlaxoSmithKline ($GSK), which has been particularly active in emerging markets, but it ended up backing away.
Reuters lines up the MN Pharma buy alongside a raft of pharma buyouts in emerging markets, including Sanofi's ($SNY) 2009 buyout of the Czech drugmaker Zentiva; almost everyone who's anyone in Big Pharma has made a deal--or several--in the developing world, where pharma growth is expected to far outstrip expansion in U.S. and Europe.
So, does the MN Pharma deal push Amgen further toward the Big Pharma way of life? Earlier this week, one analyst speculated that Amgen would have to move in that direction--toward a diversified, conglomeratized business--if it doesn't deliver on its pipeline. "If nothing comes out of the pipeline, then the company is going to be rolled into a bigger, global diversified company," said Sanford Bernstein analyst Geoffrey Porges. "That tends to be the nature of this industry."
Already, Amgen has adopted some Big Pharma-esque tactics. It declared its first dividend last year, and then announced a multibillion-dollar stock-buyback plan. And then there's the fact that its soon-to-be-ex CEO Kevin Sharer became the poster boy for an executive-pay takedown in The Washington Post. All distinctions enjoyed--or not--by the world's biggest drugmakers.