M&A to enter 'pharmerging' markets

In our weekly expert view piece, Michael Jewell, healthcare partner at Cavendish Corporate Finance LLP examines the driving forces behind the surge in acquisitions in the pharma sector and why big pharma companies are increasingly acquiring established competitors in order to get solid grounding and access to new and faster growth markets benefit from the existing sales force, as well as the legal and operational set-up of acquired businesses.

The blistering pace of pharmaceutical merger and acquisition activity in the first half of the year has been driven by a complex set of factors, including a combination of investor pressure and a narrowing window of economic opportunity. While recent heightened political and economic uncertainty has cast a shadow on M&A activity globally, we can safely say that pharmaceutical companies have survived largely unscathed from the turmoil that has gripped virtually every other sector in the market. This is evident from the succession of big pharma M&A deals totalling $45bn that were announced in the first quarter of the year, some still underway – AbbVie recently acquired Stemcentrx, Abbott purchased St Jude for $25bn, while Sanofi continues to lead a bidding war to acquire Medivation.

Pursuit of blockbuster drugs as entry point to faster growth markets