Merged pharma firms seek fast-track route to savings

25 February 2019
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The pharmaceutical industry is preparing for an accelerated pace of consolidation, with the number of mergers up 39% since 2017. This year has already witnessed its first ‘super merger’ between two of the world’s largest pharmaceutical companies, Bristol-Myers Squibb (NYSE: BMY) and Celgene (Nasdaq: CELG) valued at $74 billion.

The key drivers behind the latest round of mergers and acquisitions activity stem from the pressure to cut costs and achieve greater economies of scale , according to World Wide Technology, a technology service provider, combined with the ever-increasing cost of drug development and the mounting pressure to innovate faster. Drugs typically take 12 years from the initial discovery stage until they are market ready, with the estimated cost of £1.15 billion ($1.50 billion) per drug, and only 1 in 5,000 medicines making it to the market.

As the prospect of cost savings excites the minds of business leaders operating in the sector, pharmaceutical companies are looking for new avenues to free up budget and deliver game-changing healthcare solutions faster, according to Dave Locke, EMEA chief technology officer at World Wide Technology.

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