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March marked by many mergers and acquisitions
Our special "March M&A Madness!" cover highlights a busy month of mergers and acquisitions in the pharmaceutical and biotechnology industries. Our newsroom was abuzz with activity as we reported deals that raised eyebrows—not just because they carried price tags from $14 million to more than $7 billion—but also because some of the pairings, such as Merck KgaA and Millipore, came seemingly out of left field.
Even as we went to press, another large-figure deal hit the newswires. On March 18, generic pharmaceutical specialist Teva Pharmaceutical Industries Ltd. announced a definitive agreement to acquire Ratiopharm, Europe's largest generic drugmaker, for nearly $5 billion. The deal is expected to give Jerusalem-based Teva a top spot in the $8.6 million German market for generic drugs—the world's second-largest after the United States, according to market research firm IMS Health Inc.
But Teva wasn't the only company eyeing that potential, as Pfizer Inc. and Actavis each made their own bid to acquire Ratiopharm. According to some analysts, their obvious attraction to this successful generic drug market segment may lead them to the doorsteps of other European drugmakers, such as Stada Arzneimittel AG of Germany.
Analysts are engaging in much speculation about the sudden voracious appetites of Big Pharma, and the active M&A environment has caused stock spikes in some of the industry's most sought-after companies. According to the Wall Street Journal, news of the deals also pushed up shares of other mid-sized biotech companies that some market watchers have viewed as possible takeover targets, including Biogen Idec, Cubist Pharmaceuticals, Human Genome Sciences, Illumina Inc., Onyx Pharmaceuticals and Regeneron Pharmaceuticals.
But the active M&A environment isn't really an anomaly, according to DealSearchOnline.com, which recently reported that the last decade was marked by pharma dealmaking. According to the business intelligence firm, during the first 10 years of this century, a total of 1,345 mergers and acquisitions of pharmaceutical assets and companies were announced, with disclosed prices totaling more than $694 billion. The Wall Street Journal also recently noted that since the beginning of 2010, the industry is leading global M&A activity, but is only ranked fifth in the U.S., with $17.4 billion in deals. Still, the newspaper has speculated that the recent passage of healthcare reform legislation may prompt further consolidation.
In the meantime, we'd like to know what you, the reader, thinks of all of this activity. Send your thoughts and comments to firstname.lastname@example.org. We may publish your observations in our next issue.