Big Pharma Preparing for a Pipeline Shopping Spree

Monday 6 May 2013, Amsterdam

Despite a recent fall in deal volume and overall value,  some of the pharmaceutical industry’s major players are about to splash out in an effort to restock depleted drug pipelines, says an analyst with research and consulting.

In a new report, Adam Dion, analyst with, states that industry leaders  such as Pfizer, Merck, GSK and AstraZeneca  are paying the price for failing to adequately prepare for the effects of the patent cliff.

“Now, with revenues eroding, pharmaceutical companies are haemorrhaging profits and are increasingly relying on massive restructuring programs and divesting operations to stem the bleeding.

“Looking forward, we expect the big pharmaceutical companies to use cash from stock repurchases and proceeds from carving out these business units to ’buy’ rather than ’build’ clinical pipelines, at least in the near term.”

The combined sum of pharmaceutical industry deals (taking into account those deals where value was publically disclosed) has dropped dramatically in the past six months – from a value of $30.3 billion in September 2012, to $14.7 billion in February 2013.

But despite this recent decline, the analyst expects deal activity to climb over the next two years:

“Some companies are on public record stating their intentions to be very busy this year seeking out new acquisition targets. We believe Big Pharma is poised for M&A action, after slimming down with cost-cutting programs and divesting less profitable business units – industry giants are flush with cash and are ready to go shopping.”

Dion adds: “The industry’s returning taste for deal making could also drive more collaboration with non-profits, as more dollars flowing through the pharmaceutical sector would plant the seeds for more partnerships with academia, government and research institutions.”