Category Archives: Merger & Acquisition Strategy


“Big Pharma faces challenges to ensure profitability as a top priority function on its strategy agenda. The tasks faced by Big Pharma are uphill and some of them include maintaining sales of their existing products, some of the products going off patent face patent litigations from generic drug makers and lastly to “”focus”” or refocus on their clinical development pipeline.
The companies look at the merger and acquisition strategy with a dimension of a increasing stake in the acquired company preferably a generic drug company in an emerging market like India. The latest example of this is Pfizer. Even generic subsectors like injectables are getting crowded.
With the Pfizer’s deal making with Strides, its previous agreements with Aurobindo Pharma Ltd. and Claris Lifesciences Ltd. have been strengthened and Novartis AG’s (NYSE:NVS) acquisition of Ebewe Pharma GmbH has improved its Sandoz generics unit’s access to injectable products. Also, Akorn-Strides LLC and Fresenius Kabi AG are new names to the top flight, with the latter are acquisition of Dabur Pharma and APP Pharmaceuticals Inc., putting it in a strong position in the U.S.

Pfizer’s latest deal with India’s Strides Arcolab Ltd. also gave it an injectable boost as it strives to become one of the top five players in that subsector in five years. In December, global market leader for generic injectable pharmaceuticals, Hospira Inc. (NYSE:HSP), agreed to buy the generic injectable pharma business of India’s Orchid Chemicals & Pharmaceuticals Ltd. for $400 million.
Sanofi-Aventis SA (NYSE:SNY) is a perfect example of the general generics push. Last year, it acquired Brazilian generic drugmaker, Medley SA for about $680 million, bought Mexican generic drug maker Laboratorios Kendrick and spent $1.9 billion to acquire Czech drugmaker Zentiva NV, making it the world’s No. 11 maker of generic medicines. In May, GlaxoSmithKline plc (NYSE:GSK) bought a 16% stake in Africa’s biggest generic drug maker after Aspen Pharmacare Holdings Ltd. In July, Glaxo bought Bristol-Myers Squibb Co.’s (NYSE: BMS) branded generics drugs business in Lebanon, Jordan, Syria, Libya and Yemen.
And Merck & Co. (NYSE:MRK) made a bet on biosimilars. Merck spent $130 million on Insmed Inc.’s portfolio of follow-on biologic (or biosimilar) drugs and its commercial manufacturing facilities in Boulder, Colo. Biosimilars are copies of off-patent drugs. They’re like generic drugs but don’t face the same regulation as generics, yet. The other catch is they’re expensive to produce. “

“Agree, align and acquire are the three driving factors in the current scenario of the merger and acquisition business. Valuations are declining for listed a company worldwide which has made the collective market growth reduce by double digits. Although the US biotech markets have taken an optimistic look in the last few months, it remains to be seen as to which companies are available for acquisition. Well many would be around as the valuations of various companies despite showing profits have decreased.
The acquisition spree for Big Pharma is likely to take a steep turn towards biotech because of their inherent drying drug pipelines followed by the impact of generic competition in the times of recession on their existing blockbusters.
The deals may be less expensive but the same may not be as profitable or the deal terms may miss the lacunae the Global Pharma is wanting to fill in their not so enriched drug pipelines. ”

“The Housing market in the US has been on the downturn in the last 2 years. The rates of Chapter 11 Bankruptcies have been on the rise since the year 2007 onwards till date in the USA. Bankruptcy filings in the USA in 2008 have been the highest on account of recession and the trends are likely to continue till the onset of the year 2010. The asset prices in the year 2009 have declined sharply. Companies have closed down, people are on the streets and the jobless rate has grown to an all time high in the last 5 years of greater than 9.5 %.
Major cities in the USA have suffered because of the recession and have triggered the overall decline of the US economy.
This phenomenon has led to the availability of “”cheap”” assets for acquisition for companies wanting to establish their presence in a particular industrial sector/service sector.
The Drug industry, biotech industry and the CRO industry are no exception to this fact. All small companies which have their revenues linked to companies which have closed down their facilities have perished. The survival of the fittest has led to a clutter of companies closing at one end or being acquired to sustain/fuel the growth of another company looking to grow or establish presence.
Veeda Clinical Research is a leading Indian CRO which caters to cost effective bio-equivalence studies for the Global Pharma and biotech industry in a major way .”

The Drug industry today is witnessing a phase of mixed challenges, trends and activities. The dynamics of the global pharma has always been to establish and then grow in niche and less risk prone areas or to take a “”plunge”” in areas of untapped potential with heavy investments. These trends have been aimed at consolidation of company growth; establish the “”strategic”” position of the respective company for the short and the long term.
These trends continued till the year 2005 till the patent expiries and the “”generic”” pressures started reflecting on the Global MNC drug sales slowly. The industry was faced with a spate of patent litigations and out of the courts settlements which proceeded towards upward trends in the next 2-3 Years. As the battles became more”” fierce”” and the drug industry was faced with the “”Generic”” Outbursts in a major way, there came the recession blues.
The options for Big Pharma were reducing as the reducing sale of their branded drugs was eating into their profit margins. This has made the Big Pharma approach the “generics”domain in emerging markets like India, China, Malaysia etc. to name a few.
Outsourcing of generic drugs for proving them bio –equivalent to branded drugs has been predicted to be on the rise on account of such happenings in big pharma.
Veeda Clinical Research is an Indian CRO which provides cost effective Bio-Equivalence studies for the drug industry.

“The age of the dinosaurs was the one when some survived while some perished. The bigger and the carnivorous ones ate those which were less powerful or died because of the changing environment. The ones which survived continued to live for some time and sustained their generation for a few million years. As the earth’s changing environment moves towards further development, the earth was dominated by creatures with a blend of superior and less superior intelligence. Once again an era of the “”survival of the fittest “”went on to make itself predominant and establish its significance
The drug industry is not new to this phenomenon. Buying and selling has been occupying a major scene in the drug industry today. Big Pharma is buying small pharma, Big Pharma is buying Small biotech and Big Pharma is acquiring another Big Pharma Peer.
The trends that are visible today in the drug industry move towards a macro followed by a micro and then another emerging macro picture.
Veeda Clinical Research is an Indian CRO which provides cost effective Bio-Equivalence studies for the drug industry. ”

“The stories and fables of yesterday were true yesterday and stand true today. The fables of yesterday are applicable to the drug industry. The drug industry in the last decade has taken the stand of being big by virtue of size, presence and revenues worldwide. It seemed that the trends of this nature would continue till the “”slow down “”phenomena and the economy crisis affected the global economy. Companies perished due lack of funds, newer players started to place their existence, too many competition swings affecting the drug market, investor pressures, pressures on returns, generic drug pressures due to patent expirations loomed over the Big pharma to name a few. A lacuna in terms of accurate corporate governance has also been an important factor in undermining the growth of various corporate in a major way. The Lehman Brothers, Lloyds bank and the Satyam case speak for themselves.
To avoid further serious pitfalls in long term growth strategies of companies, companies which are in the competitive market have decided to “”join”” hands and move forward towards establishing their presence in the market. This phenomenon speaks for itself when Merger and acquisition activities, strategic alliances and joint ventures dominate the trends for the day. A lot of these trends are taking place in emerging markets like India. The nature of this alliance could be between Big Pharma-Small Pharma, Big Pharma- Biotech, Small Pharma-Biotech, etc.
Veeda Clinical Research is an Indian CRO which focuses on BA BE Studies (Bio-Equivalence Studies) for the drug industry. ”