PharmaSphere: Pharmaceutical and Healthcare Deal Trends in Latin America: 2008 – 2012

Monday 10 February 2014, Amsterdam

The pharmaceutical market in Latin America (LATAM) represents one of the two key global regions experiencing a higher investment in recent years. The top 15 pharmaceutical and healthcare deals reflect this trend in the categories of mergers and acquisitions (M&As), licensing agreements, and collaborations and partnerships over a time period of five years, from January 1, 2008 to December 31, 2012. It should be noted that values where publicly available have been included in this report and are based on the assumption that the various agreed upon milestones have been achieved in order to ensure clarity and standardization in the analysis presented in the report.  

Regarding M&As in LATAM, the trend has largely been a mix of global pharma firms acquiring local companies such as UnitedHealth buying Amil Participates, and Sanofi acquiring Medley Indústria Farmaceutica as well as the consolidation among domestic manufacturers. For example, the acquisition drive by Hypermarcas and CFR Pharmaceuticals depict the latter trend. On licensing agreements, Mexico and Brazil have seen higher activity with arrangements for global firms to license products to market in the domestic market. The agreement between Ampio Pharmaceuticals and FBM Indústria Farmacêutica (FBM Farma) represent this licensing trend. In terms of collaborations and partnerships, the joint ventures between two sets of four companies to develop and commercialize biosimilars, as seen in Brazil, serves as the most interesting trend because it signals the potential for unique partnerships among rivals; this trend also helps spread the risk while entering a new complex market segment.

The figure illustrates the percentage of spending for each of the types of deals in the LATAM region during 2008–2012. In terms of the split in the total deal volume, the top two spots are taken up by M&As followed by licensing agreements. These two categories combined remain as one of the key and popular sources of investment in the LATAM sector. The higher interest in the M&A category that also includes asset transactions has witnessed strong activity in the region. After the Asia-Pacific (APAC) region, LATAM has shown evidence of a growing interest from multinational pharma firms, which is part of the shift in the industry dynamic towards the emerging markets that will boost revenue growth.

Regarding licensing agreements, the deal structure and motivation has been predominantly geared towards the licensing of marketed products as well as some Phase II and Phase III drugs undergoing development. This trend is based on the nature of the LATAM markets (which are largely generic), and the cautious approach by global multinationals who are primarily seeking to establish distribution and marketed portfolios. The volume of strategic collaborations and partnerships comes in at a distant third, but it does represent some unique joint-venture efforts.