NEW ERA IN M&A TRENDS
In the following years, an increase has been observed in the acquisition and merger transactions of the company, which decreased during the global crises in the world.
New Trend in Big Pharma: Spinoffs
Pharmaceutical companies frequently carry out M&A activities within the scope of new product development. However, in the past 5 years factors such as the pressure from governments to prohibit increases in drug prices and some companies being overdependent on a single product have significantly increased the number of megamerger transactions in the sector. For example: • Bristol-Myers Squib’s acqusition of oncology focused Celgene for 74 billion USD, • AbbVie’s acquisition of Allergan for 64 billion USD; in order to compensate for the loss of income that will occur due to the expiration of the patent of Humira, one of the biggest drugs of AbbVie, • Japanese Takeda’s acquisition of Shire Pharmaceuticals for 63 billion USD.
However, we are facing a new trend in the industry which started in 2019 and continues in 2020: companies divest off-patent drugs, generic drug divisions and divisions which grows slower / faster than the rest of the company, through spinoffs.
OK or Continue?
We will never be able to go back to the new norm. So what do we do now? From this point on, how will we manage our business according to the new conditions?